Public Pension Funds in Trouble (article)

[Sherman]

Hidden Pension Fiasco May Foment Another $1 Trillion Bailout:
http://bloomberg.com/apps/news?pid=20601109&sid=alwTE0Z5.1EA&refer=home

The article is rather long so I won't post it all here, but here are a
few quotes:

“There are accounting gimmicks in pension land which create economic
fictions and which disguise the severity of the real problem,” Kramer
says. “Unfortunately, pension board members don’t have much of an
appetite for disclosing inconvenient truths.”

~~~~~

“It’s pitiful, isn’t it?” says Frederick “Shad” Rowe, a member of the
Texas Pension Review Board, which monitors state and local government
pension funds. “My experience has been that pension funds misfire from
every direction. They overstate expected returns and understate future
costs. The combination is debilitating over time.”

~~~~~

"A government retirement plan can’t go bankrupt, even if it’s
insolvent; state treasuries must put up the money if a fund runs dry."

Unfortunately, Metro isn't the same as a state or local government.
Metro cannot tax, they can only ask for more money.

I'm not suggesting that Metro's pension fund is underfunded (I have no
way of knowing). In fact, last I heard we had a surplus, but it would
be nice to be able to review the latest financial statement(s).

Sherman

[Sherman Johnson]

Melvin,

 

The thread I created is titled, "Public Pension Funds in Trouble (article)".

 

When Google Groups send out emails, they put "[Local 689]" at the beginning of the subject line, so that the recipient will know at a glance where it is from.  Unfortunately, that led to some misunderstanding on your part.

 

It was certainly not my intention to be 'sensational'.  In fact, if you read my post I clearly said:

 

"I'm not suggesting that Metro's pension fund is underfunded (I have no way of knowing).  In fact, last I heard we had a surplus...".

 

That is hardly sensational or alarmist.

 

I do think it is important for our pension fund financial statements to be readily available.

 

In a recent email, Mike Golash reminded me that WMATA is legally obligated to make the necessary contributions to our pension fund to ensure it is fully funded.  My only concern is that Metro must get that money from the states.  That said, I think we're in a better position than most.

 

Sherman

 

 

 

 

----- Original Message -----

From: <melvi...@aol.com>

To: <mrnat...@comcast.net>; <atu-lo...@googlegroups.com>

Sent: Wednesday, March 04, 2009 7:27 PM

Subject: Re: [Local 689] Public Pension Funds in Trouble (article)

way of knowing).  In=2
0fact, last I heard we had a surplus, but it would

be nice to be able to review the latest financial statement(s).

Sherman

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SHERMAN,
I FEEL THAT YOU HAVE A UNIQUE TALENT FOR OBTAINING ATTENTION, BUT TO
HEAD AN E-MAIL
[LOCAL 689] PUBLIC PENSION FUNDS IN TROUBLE (ARTICLE) IS A BIT
SENSATIONAL. AS I NEAR RETIREMENT YOU CERTAINLY GOT MY ATTENTION. YOU
SEEM TO BE WASTING YOUR TALENTS
BLOGGING ON THE 689 GOOGLE GROUP SITE.    MELVIN

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[melvi...@aol.com]

-----Original Message-----
From: Sherman <mrnat...@comcast.net>
To: ATU Local 689 <atu-lo...@googlegroups.com>
Sent: Wed, 4 Mar 2009 6:33 pm
Subject: [Local 689] Public Pension Funds in Trouble (article)

way of knowing). In=2
0fact, last I heard we had a surplus, but it would

be nice to be able to review the latest financial statement(s).

Sherman

[mrnat...@comcast.net]

This past Monday, 3-2-09, I emailed one of the union officers and
asked about having the pension fund financial statements made
available to all members.

I hope to hear something from him soon.

[jacki...@atulocal689.org]

Sherman
I don't know who you emailed but as a member of local 689 you have the right to visit the Fin.-Sec office and see the pension reports. But it will not be posted on the website! Apparently, although invited to attend contract arbitration, you haven't attended. If you did you would know that posting our fund on the web when WMATA is proclaiming that its to rich for blue collar and we should give the Authority some releif and we should pay it. Trade it in for a 401K. That kind of behavior is just they need to impress the arbitrator. Don't be so lazy if there something you want to know, man up and ask the question. Our fund has 1.5 Billion in it. Yes its taking a hit like everybody else who is invested in the stock market. We are a part of the market and the economy, don't spread fear there's enough without help.
Sent via BlackBerry by AT&T

-----Original Message-----
From: mrnat...@comcast.net

Date: Fri, 6 Mar 2009 15:56:05

To: ATU Local 689<atu-lo...@googlegroups.com>

Subject: [Local 689] Public Pension Funds in Trouble (article)

[mrnat...@comcast.net]

Jackie,

I know you to be an intelligent professional woman, so I was very
surprised and disappointed by your reply.

Why would you resort to using words like "lazy" and "man up" --
especially in a public forum such as this? I have always been polite
and respectful in my communications with you and have certainly never
insulted you in any way. In fact, our most recent (private) email
exchange was very cordial.

As a matter of fact, a majority of Local 689 members rarely attend
union meetings and have not been to any arbitration hearings. Are
they 'lazy' also?

I don't even know how to respond to a statement like, "man up and ask
the question". What does that mean? Anyone who knows me knows I'm
not afraid to ask questions! I've asked if we could see the pension
fund financial statements. I've asked if the fund is covered by the
Pension Benefit Guaranty Corporation (PBGC). Apparently those
questions aren't 'manly' enough for you. Again, many other members
are asking the same questions -- would you say the same to them?

As for the question you seem to think I should be asking -- how much
money is in the fund -- that's only one part of the equation. Other
parts of course are earnings (or loss) and liabilities -- how many
retirees, their average life expectancy, the average pension amount,
etc. Without knowing the rest of the facts, an amount like $1.5
billion means very little.

I understand that the pension fund info is available at the union
hall. My question is, why isn't it made available to all members --
if not online then at the very least in an annual statement that is
mailed to all members? It could be combined with a Local 689
newsletter mailing to save money. Even homeowners' associations send
out annual financial statements. I've never hear of a bank, a mutual
fund, or a corporation requiring customers/stockholders to come to
their offices to look at a financial statement.

If a Local 689 member were to go to the Financial Secretary-
Treasurer's office, would that member be allowed to make a copy of the
financial statement(s) so they could review them at their convenience?

There may very well be a good reason not to post the pension fund
statements online, but I haven't heard one yet. Doesn't WMATA have
all of the pension fund info already? After all, they're making 100%
of the contributions. Since the contributions are made with public
funds (tax dollars) doesn't any American citizen have the right to
that information? I don't know, I'm asking. In fact, I'm surprised
that our friends at the Examiner (and others) haven't already filed a
'Freedom of Information Act' request.

I realize that WMATA is going to try and use whatever nasty tricks
they can to make it look as though we make too much money, our
pensions are too fat, etc. My question is -- isn't it common
knowledge how much we make and how our pension is calculated? Wasn't
that beat to death by the Examiner? They even published a list of
every employee along with their salary. Then they cherry picked a few
of the highest earners and figured out what their pension would be.
My point is, isn't the cat out of the bag so to speak? I don't see
what we are trying to hide or why.

Apparently you misinterpreted my post. I am certainly not trying to
'spread fear' (your words). As I said to Melvin (above):

~~~~~

"It was certainly not my intention to be 'sensational'. In fact, if
you read my post I clearly said:

"I'm not suggesting that Metro's pension fund is underfunded (I have

no way of knowing). In fact, last I heard we had a surplus...".

That is hardly sensational or alarmist.

I do think it is important for our pension fund financial statements
to be readily available."

~~~~~

I know my coworkers and I have seen our 457 accounts shrink quite a
bit. I'm sure the pension fund is 'taking a hit' as you said. That's
to be expected.

I don't see anything wrong with sending the members a financial
statement showing assets and liabilities of the pension fund once a
year.

In addition, according to section 11.04 of the contract [paraphrasing]
'the pension must be evaluated annually by the plan actuary who shall
report the soundness and solvency of the fund as well as the amount of
the annual Authority contributions necessary to fund the benefits'. I
believe the membership should be provided with the results of this
evaluation.

Asking questions and making constructive suggestions is not the same
as 'spreading fear'. Things don't look good right now, but if history
is any guide 'this too shall pass'. The economy will bounce back
sooner or later. Regardless of the condition of the economy, we
should be kept informed.

Sherman