Post by jeffolie on Apr 14, 2012 12:05:29 GMT -6
Longer term the fundamental pensions problem remains underfunding by STATES, CITIES, LOCAL AGENCIES which refuse to increase taxes to meet their promised contributions:
"... Muni Watch:
April 10 – Financial Times (Hal Weitzman and Nicole Bullock): “US states are increasingly being blocked from changing public employees’ retirement benefits as the fight over shoring up chronically underfunded public pension systems moves from state legislatures to the courts. While some states have successfully altered terms for future employees, plans to force all current public workers to contribute more to state pensions have been ruled unconstitutional in Florida, Arizona and New Hampshire in recent weeks, a significant victory for public sector employee unions. Other states are expected to face similar legal battles as they plan to close large holes in their public pension funds by redrawing benefits. US state and local pensions could face a shortfall of as much as $4.4tn, up from $3.1tn in 2009, according to some estimates."
April 10 – Bloomberg (Josh Barro): “Rod Blagojevich is in prison. But the worst things the former governor did to Illinois weren’t even illegal. This month, the Teachers’ Retirement System of the State of Illinois made a dire announcement to its members. TRS, which covers most public-school teachers in Illinois outside Chicago and has more than 360,000 members, said the following: ‘If the General Assembly does not continue to provide all of the funding called for in state law, calculations done by TRS actuaries show that the System could become insolvent as soon as 2030. Preventing insolvency may include significant changes for TRS -- new revenues must be generated and if they are not benefits may have to be reduced.’”
April 9 – Bloomberg (Amanda J. Crawford): “Las Vegas’s credit outlook was lowered to negative from stable on $561.2 million of debt by Fitch Ratings, which cited budget deficits and the lingering housing crisis.”
California Watch:
April 10 – Financial Times (Dan McCrum): “California must increase contributions to teachers’ pensions by more than half to close a $64.5bn funding hole in the country’s second largest public retirement system, according to the actuarial valuation to be presented to the board of Calstrs this week. The $144bn of assets managed by the California State Teachers’ Retirement System covered only 69% of future liabilities at the end of June 2011, a drop of 2 percentage points from the year before. In a sign of the problems faced by many public pension plans, the hole is too large to be covered by better investment performance.”
April 9 – Bloomberg (James Nash): “The California State Teachers’ Retirement System, the second-biggest U.S. public pension, said the gap between its assets and projected obligations rose $8.5 billion as investment gains failed to cover earlier losses. The unfunded liability climbed 13% to $64.5 billion as of June 30… The system had about 69% of assets needed to cover promises to current and future retirees at the end of fiscal 2011, down from about 71% a year earlier.”
prudentbear.com/index.php/creditbubblebulletinview?art_id=10651
"... Muni Watch:
April 10 – Financial Times (Hal Weitzman and Nicole Bullock): “US states are increasingly being blocked from changing public employees’ retirement benefits as the fight over shoring up chronically underfunded public pension systems moves from state legislatures to the courts. While some states have successfully altered terms for future employees, plans to force all current public workers to contribute more to state pensions have been ruled unconstitutional in Florida, Arizona and New Hampshire in recent weeks, a significant victory for public sector employee unions. Other states are expected to face similar legal battles as they plan to close large holes in their public pension funds by redrawing benefits. US state and local pensions could face a shortfall of as much as $4.4tn, up from $3.1tn in 2009, according to some estimates."
April 10 – Bloomberg (Josh Barro): “Rod Blagojevich is in prison. But the worst things the former governor did to Illinois weren’t even illegal. This month, the Teachers’ Retirement System of the State of Illinois made a dire announcement to its members. TRS, which covers most public-school teachers in Illinois outside Chicago and has more than 360,000 members, said the following: ‘If the General Assembly does not continue to provide all of the funding called for in state law, calculations done by TRS actuaries show that the System could become insolvent as soon as 2030. Preventing insolvency may include significant changes for TRS -- new revenues must be generated and if they are not benefits may have to be reduced.’”
April 9 – Bloomberg (Amanda J. Crawford): “Las Vegas’s credit outlook was lowered to negative from stable on $561.2 million of debt by Fitch Ratings, which cited budget deficits and the lingering housing crisis.”
California Watch:
April 10 – Financial Times (Dan McCrum): “California must increase contributions to teachers’ pensions by more than half to close a $64.5bn funding hole in the country’s second largest public retirement system, according to the actuarial valuation to be presented to the board of Calstrs this week. The $144bn of assets managed by the California State Teachers’ Retirement System covered only 69% of future liabilities at the end of June 2011, a drop of 2 percentage points from the year before. In a sign of the problems faced by many public pension plans, the hole is too large to be covered by better investment performance.”
April 9 – Bloomberg (James Nash): “The California State Teachers’ Retirement System, the second-biggest U.S. public pension, said the gap between its assets and projected obligations rose $8.5 billion as investment gains failed to cover earlier losses. The unfunded liability climbed 13% to $64.5 billion as of June 30… The system had about 69% of assets needed to cover promises to current and future retirees at the end of fiscal 2011, down from about 71% a year earlier.”
prudentbear.com/index.php/creditbubblebulletinview?art_id=10651