STUMP » Articles » Around the Pension-o-Sphere: Jane the Actuary, ESG, California Rule, and More » 10 March 2019, 08:54

Where Stu & MP spout off about everything.

Around the Pension-o-Sphere: Jane the Actuary, ESG, California Rule, and More  

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10 March 2019, 08:54

I haven’t done one of these in a while, but I’ve built up a bunch of links in my Actuarial Outpost Public Pensions Watch (for 2019), as well as my other pension watch threads, and thought you might be interested in some of the themes I’ve come across.

Most of these will be short comments followed by a bunch of links. For simplicity, I’m linking to the Actuarial Outpost posts with the specific items, except in the first category.

JANE THE ACTUARY

Jane the Actuary, aka Elizabeth Bauer, writes on a variety of topics in multiple places. The primary pension interest articles can be found on her personal website, Jane the Actuary, and her Forbes contributor page.

In no particular order, some recent posts from her:

Two large differences between Bauer and me: she actually lives in Illinois, and she’s a pension actuary (my specialty is life insurance and annuities).

ECONOMIC, SOCIAL, AND GOVERNANCE ISSUES

I’ve written about this a lot. I’m not going to link to my prior posts, but I thought you might be interested in a “local” (to me) story.

The State Comptroller, DiNapoli, recently sent a letter re: women on corporate boards. I don’t care about the specific companies being targeted (and the letter notes that a few dozen other companies have already gotten such letters.)

I just want to point out the crass hypocrisy: there are no female trustees for the New York State pensions.

….Because the state comptroller is the sole trustee.

I think having a sole trustee for a pension plan, whether public or private, is even worse than having no women on a corporate board (especially if the companies are in an industry, like construction, where there are few women involved at any level.)

DiNapoli, call for better pension governance!

More ESG stories:

That final item is my position, essentially. I do think it’s important to consider governance of the companies a pension invests in, whether as an equity- or debt-holder. But some of the other items… it’s iffy. And I’m also talking about items I’m politically sympathetic to: those trying to battle anti-Israel campaigns. But the appropriate response is not to ban companies involved in BDS.

There can be reasons not to invest in companies based in certain countries, due to instability or other issues (like corruption). That I understand.

But the point is that the trustees are fiduciaries for the pension plan participants. Not for pursuing whatever political ends. Most of the trustees try to at least provide a veneer of protecting the investment, but some don’t even bother.

CALIFORNIA RULE ROUND-UP

Last Monday, the California Supreme Court ruled that certain pension benefits could be cut (specifically, air time, which is where employees can “buy” years of credited service to boost their final pensions.) This is a minor victory, and it’s better than nothing. But even getting rid of airtime is not going to help with respect to unfunded liabilities that cannot be changed.

The actual ruling can be seen here.

I want you to note the conflicting headlines. Something was being allowed to be cut – airtime – but the core benefits are untouched.

I don’t know how large a problem airtime purchases are in the California pensions, but I’m willing to bet it’s much, much smaller than the base pensions.

MULTIEMPLOYER PENSIONS ROUND-UP

There was yet another Congressional hearing over failing multiemployer pensions. You can see the prepared remarks at that link.

You can see the whole session on YouTube, if that’s what you want:

John Bury took some excerpts at his blog.

I will transcribe one of those videos:

TRAHAN (D-MA): Is there anyone on the panel who does not think that federal assistance is required right now to stabilize the PBGC

[pause]

Terrific.

Everyone agrees that inaction is not an option.

Well, making a lot of noise with words is not inaction, right?

FWIW, the PBGC is in big trouble over the multiemployer plans. However, and this is damning, this trouble comes from extremely low “guaranteed” benefits. Those asking for bailouts want something better than that bare minimum.

More on these ailing pensions:

That last one is a good round up of the testimony.

I know they want to do some sort of bailout, but I have no idea what form this will take. I can see something passing the House easily, but I’m not sure about the Senate.

PENSION HODGE-PODGE

Finally, just throwing a bunch of stories in. These are not every story I link at the Actuarial Outpost. I gather a lot of stuff there I never blog about… or more, I’m trying to capture a trend over time and I may come back to some entries years later.

I throw a fairly broad net for pension news stories, and I select which ones I want to blog about. But I do keep a record of pretty much anything of significance I can find at the Outpost.

Phew.

Stay warm, everybody!


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