It's an actuarial world
For those who have been paying attention to the detriment of other valuable things in your life. I just want to point out one thing. The last time an attempt was made to infuse the pension system with a large asset value in order to 'save' it, this is the amount of work it took to even begin considering that decision:
http://www.briem.com/files/PittsburghPensionRestructuring.pdf
As best I can tell, folks think they have been doing similar due diligence with pencil and paper on the fly these last few days. At one point they were using a calculator at the table in city council to make verbal ammendments. It just does not work that way.
Where we are at? What it means? What tomorrow will bring? I'm still waiting for city web site to post what actually was passed to make sense of it all.
addendum.. This is almost philosophical, but it just occurs to me.. if PERC accepts a promise of future tax revenue as a valid asset for Act 205 purposes, why did the city ever bother to borrow money in the form of pension bonds in the 1990's? I wonder if this will set a precedent for a lot of other Pennsylvania municipalities to use. SERS or PSERS might have something to think about as well. Could solve lots of difficult pension accounting in the state.
6 Comments:
It really is nuts to dispose of hundreds of millions of dollars this way. But this Council has an . . . interesting relationship to big numbers.
Math Schmath
What are the investment assumptions in these old projections?
unrealistic I have no doubt.
Of course, we don't need to worry about that any more. Pension board has stipuated that future assumptions on rate of return will be lowered to 8%... from the 8.75 they used until 2009 even. Anyone have the stat on what proportion of pension funds earn 8% or higher consistently?
I'd actually take odds on anyone who wants to bet they roll back the roll back and use a higher number for the next calculation of the MMO.
Of course, we don't need to worry about that any more.
We must learn from past failures.
Where can a taxpayer find out who is making investment decisions on their behalf?
And where can a taxpayer find out where their payments have been invested?
Its great to see that people are sharing quite profitable information with each other and now we can move our selves to a new era.
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