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Old 11-30-2009, 06:47 PM
 
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One of the things we need to remember is that while pensions are a major unfunded liability for states the money in the fund is probably the biggest funded asset they have.
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Old 11-30-2009, 07:39 PM
 
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But in many states the state government does not really control the funds at all really.
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Old 11-30-2009, 08:16 PM
 
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Originally Posted by texdav View Post
But in many states the state government does not really control the funds at all really.
Very true and it is a good thing they don't. One of the problems some of the state funds have is that in previous years the state didn't make their required contribution (N.J.) and I believe some states have raided their funds for budget purposes.
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Old 12-01-2009, 09:10 AM
 
Location: Sacramento
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But, we don't know how things would play out if a state actually went ahead with bankruptcy.
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Old 12-01-2009, 09:57 PM
 
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Originally Posted by TuborgP View Post
Very true and it is a good thing they don't. One of the problems some of the state funds have is that in previous years the state didn't make their required contribution (N.J.) and I believe some states have raided their funds for budget purposes.
That is a problem with many private retirement plans also, look at what happened to the airlines.Then there are ones that actaully did set the money in escrow and when the company was sold the retirement escow of the companies was far higher than the obligation in contacts. This happened with gulf oil here and the employeees sued that the moeny was thiers but of course they loss. That as a warning for companies to keep it low really.
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Old 12-01-2009, 10:14 PM
 
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Originally Posted by NewToCA View Post
But, we don't know how things would play out if a state actually went ahead with bankruptcy.
From previous discussions not sure if states can however I know from a few pensions the problem isn't short term severe. States really have a problem if they go below 80% funded. Also I saw a rep from the Cal pension system on tv and he was saying that their pension is ok if you look at it over a 20 year period with highs and lows. Now is a low but on average they are meeting their annual return targets which is based on a 20 year average. Also the states have enough money in their fund to last a number of years. It is the out years that have a problem if their is no change. City pensions are often a number game. Also pensions have been used in the past (including Calif) to help balance the budget so painting as bad guys is sometimes a mistake.

CalPERS Approves Health Premium Holiday for PPO Members and Employers


Seems like Calpers had excess reserves in April. It is the state that is hurting and struggling to meet their obligated contribution.
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Old 12-01-2009, 10:17 PM
 
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http://www.calpers.ca.gov/eip-docs/about/facts/investme.pdf (broken link)

December financial statement from Calpers. Like I said the pension there as in most states is probably the biggest funded fund around. Note the drop from last year to this year and the return for the last three years. Like our own portfolios the rebound is happening and to use a March 2009 number as your baseline is probably sensationalizing the issue.
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Old 12-02-2009, 06:10 AM
 
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Originally Posted by NewToCA View Post
But, we don't know how things would play out if a state actually went ahead with bankruptcy.
Although municipalities within a state can file for bankruptcy protection, the state itself cannot.
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Old 12-02-2009, 07:28 AM
 
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Originally Posted by MadManofBethesda View Post
Although municipalities within a state can file for bankruptcy protection, the state itself cannot.
Yeah we went around about that earlier in the thread. I think he was following up to the previous discussion with what if they tried to do what they are legally not allowed to do. We reached a point previously in discussion of what happens when a state is functionally unable to pay their obligations. What happens when a state is out of money and still has a few hundred billion in their independent pension fund?
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Old 12-04-2009, 09:46 PM
 
Location: Sacramento
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I had this in the back of my mind when posting about state bankruptcy:

The Governmental Accounting Standards Board, shook up state and local governments five years ago by directing that the future unfunded debt for retiree health care be calculated and reported.

In California, most government agencies have not set aside money for health care promised current workers when they retire. A governor’s commission last year made the first estimate of the total unfunded debt: $118 billion over the next 30 years.


Battle over costly pension rule proposal Calpensions
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