OPS Pension Fund $771M Short After Odd Investments

[RedDenver]

7 minutes ago, HuskerNBigD said:

The whole safe-harbor scheme is to benefit highly compensated employees.

I think this is the strongest argument you've made for pensions over contributions.

[BigRedBuster]

https://money.cnn.com/2018/04/12/retirement/state-pension-funds/index.html

 

 

[RedDenver]

53 minutes ago, BigRedBuster said:

https://money.cnn.com/2018/04/12/retirement/state-pension-funds/index.html

 

 

The states have a $1.4 trillion shortfall, and the tax cuts caused a $1.4 trillion deficit. Hmmm...

[Moiraine]

I’ve never really gotten much into investing (didn’t have a good job until the past few years) so I don’t know much about it but isn’t 7.5% a high projection (from the article)? It’s not a high goal but seems a high amount to assume you’re going to get. I always try to assume the worst when I’m thinking about $ so that’s where I’m coming from. 

[RedDenver]

36 minutes ago, Moiraine said:

I’ve never really gotten much into investing (didn’t have a good job until the past few years) so I don’t know much about it but isn’t 7.5% a high projection (from the article)? It’s not a high goal but seems a high amount to assume you’re going to get. I always try to assume the worst when I’m thinking about $ so that’s where I’m coming from. 

7% is the historical stock market average when accounting for inflation. So 7.5% is a bit high, but that average is very misleading because yearly volatility is also very high, which means no investor should be counting on a particular return in any given year but rather an average return over a period of 10+ years.

[RedSavage]

19 hours ago, BigRedBuster said:

This sounds like a great plan.

 

https://www.cbsnews.com/news/the-gm-pension-plan-a-100-billion-problem-swept-under-the-rug/

 

 

 

 

I'm not sure of the current state of GM's pension but they, along with many others, have turned their pension plans over to Prudential for them to manage them.  So I imagine they're in much better shape now than they were in 2009.  That's what most large pension plans have done, and that's what OPS should have done a long time ago.

[HuskerNBigD]

21 hours ago, RedSavage said:

I'm not sure of the current state of GM's pension but they, along with many others, have turned their pension plans over to Prudential for them to manage them.  So I imagine they're in much better shape now than they were in 2009.  That's what most large pension plans have done, and that's what OPS should have done a long time ago.

Yup. Posting articles from nearly ten years ago doesn’t really paint the current picture. Then again, neither does picking an article that discusses one of the most debt-laden cities in the country. 

 

But you’re absolutely right. A lot of pension plans have offloaded their risk to money managers who are running Liability Driven Investment (LDI) strategies. 

[HuskerNBigD]

23 hours ago, RedDenver said:

The states have a $1.4 trillion shortfall, and the tax cuts caused a $1.4 trillion deficit. Hmmm...

This could be considered misinformation. Did I use the term correctly?

 

The tax cut was at the federal level and its impact at the state level was minimal. In fact, in some states the ruling actually cause some taxpayers to pay greater state income tax than in years past. So the $1.4T shortfall of state pension funds was is hardly correlated to the 2018 tax cut. 

 

https://www.nytimes.com/2018/05/12/business/economy/state-tax.html

[RedDenver]

54 minutes ago, HuskerNBigD said:

This could be considered misinformation. Did I use the term correctly?

 

The tax cut was at the federal level and its impact at the state level was minimal. In fact, in some states the ruling actually cause some taxpayers to pay greater state income tax than in years past. So the $1.4T shortfall of state pension funds was is hardly correlated to the 2018 tax cut. 

 

https://www.nytimes.com/2018/05/12/business/economy/state-tax.html

You're missing what I'm implying - that we could have not had tax cuts and instead funded the state pensions and have the same amount of deficit.

[HuskerNBigD]

2 minutes ago, RedDenver said:

You're missing what I'm implying - that we could have not had tax cuts and instead funded the state pensions and have the same amount of deficit.

Ok! I see what you're trying to get at, but I still don't think that works given the fact you're comparing a state liability to a federal liability. Now, if the tax cut only impacted state taxes, you could make the argument. However, the impact of the 2018 cuts was at the federal level.

 

A majority of states either saw their taxes not impacted, don't have state taxes to begin with, or saw a slight tick upward.

[RedDenver]

1 minute ago, HuskerNBigD said:

Ok! I see what you're trying to get at, but I still don't think that works given the fact you're comparing a state liability to a federal liability. Now, if the tax cut only impacted state taxes, you could make the argument. However, the impact of the 2018 cuts was at the federal level.

 

A majority of states either saw their taxes not impacted, don't have state taxes to begin with, or saw a slight tick upward.

I'm only half serious, but the federal government can bailout the state governments if we want that to happen and vote for it and pressure our elected officials.

[HuskerNBigD]

1 minute ago, RedDenver said:

I'm only half serious, but the federal government can bailout the state governments if we want that to happen and vote for it and pressure our elected officials.

No worries, I need to learn how to better recognize tongue in cheek comments. 

[Mavric]