To hedge or not to hedge

The $300 billion California Public Employees’ Retirement System (Calpers), America’s largest public pension fund, is eliminating its $4 billion stake in hedge funds due to their “complexity, cost, and the lack of ability to scale,” the fund’s interim chief investment officer has just announced. But the …

GOP’s Fung has his own R.I. pension reform story

State Treasurer Gina Raimondo’s victory in the Sept. 9 Rhode Island Democratic gubernatorial primary has attracted a lot of national attention (see here, here and here, for instance) in large part because of her successful state pension reforms. But her Republican opponent, Cranston Mayor Allan Fung, has his own retirement reforms to tout in a state where municipalities have been under severe pressures from rising retirement costs, too…

Pay to play in PA: Why not bribery as a tool for pension reform?

If you mine down into Pennsylvania Auditor General Eugene DePasquale’s recent pension report, you can find some gems hidden among the recommendations that I believe risk creating a “financial super-fund site.”  With a few minor tweaks, DePasquale’s proposal could be turned into a robust model …

Raimondo wins gubernatorial primary in RI

State Treasurer Gina Raimondo won the Rhode Island Democratic Party’s nomination for governor yesterday. It was a hard fought race, where public sector unions, who were angry about a pension reform measure she engineered in 2011, backed her opponents.  Her victory is something of a referendum …

Pensions drive local taxes up, up and away in PA….

Pennsylvania Gov. Tom Corbett’s call for pension reform hasn’t resonated with the state’s residents, which is one big reason why Corbett hasn’t been able to persuade even his own Republican colleagues in the state legislature to enact changes to the state’s underfunded pensions. But now that municipal and school taxes are going up around the state in direct response to higher pension costs…

Is Pennsylvania building a “Too Big To Fail” pension system?

Based on recent comments by the state Auditor General, it seems that Pennsylvania’s approach to its escalating pension crisis is to embrace a “Too Big To Fail” structure – by consolidating municipal pension funds into larger systems and then back-stopping the underfunded systems with state …

Haste, not bias is what’s behind Detroit’s grand bargain

Detroit’s bankruptcy plan is finally underway and to no one’s surprise, much of the debate and controversy have concerned the inaptly named “grand bargain.”
As critics have pointed out, it’s not really a bargain or deal at all, but just a plan, for several foundations and …

When reporters don’t bother reading budgets….

The Grey Lady had a story Monday on how Los Angeles can’t afford to invest in its crumbling infrastructure because of a continuing budget squeeze. The story starts off with an embarrassing mistake, confusing the LA County budget ($26 billion) for the city budget ($8.1 billion)–see correction at end of later editions. Then it contains not a single other budget number of consequence throughout, suggesting the reporter never bothered (or wasn’t capable of) reading the city’s budget. That’s one reason why the story only briefly mentions pensions but hangs the problem on a host of other issues including (wait for it) Californians’ aversion to higher taxes (yeah, really)…

The cost of pensions: decrepit cities and not just huge debt

Many people’s eyes still glaze over when I talk about unfunded pension liabilities. Often I see people looking at their watches and trying to figure out an exit plan at the mere mention of the name, California Public Employee’s Retirement System (CalPERS). But average folks …

Pension reformers facing declining options in California

The union activists who dislike my views on the pension-reform topic reportedly were pleased with a recent Public Sector Inc. post I wrote facetiously calling for pension reformers to give up the ghost. The state desperately needs reform, but what are we going to do …