STUMP » Articles » Around the Pension-o-Sphere: Fiscal Reporting Bootcamp, Transparency, Divestment Hero, and More » 29 March 2018, 16:08

This is on Thursday, as I don’t want to post tomorrow, Good Friday.

This one is going to be a little different in terms of themes — this is more about things I’m looking at/thinking about in general… and stepping back from looking at the messes in New Jersey, Kentucky, Illinois, California, etc.

None of this involves something of right now, but thinking about systems and how to get out of the cycle of systems where pensions are deliberately underfunded, where benefits are insanely boosted without brakes, and where the hot potato of blame keeps getting tossed around. I’d rather not have someone to blame – I’d rather have a system that works.

TRAINING FOR REPORTERS ON FISCAL MATTERS

I was recently pointed to the Ravitch Fiscal Reporting Program at the CUNY Graduate School of Journalism.

Obviously, I am not a journalist (and I understand fiscal matters fairly well), but the concept is that we need people able to see what’s actually news in public finance, what needs to be looked at more carefully, and not just run a lightly edited press release from whatever governmental entity has released recent financials.

Here are the details:

The Ravitch Fiscal Reporting Program at the CUNY J School provides advanced training in state and local fiscal issues through week-long and weekend programs emphasizing in-depth knowledge of key controversies, overcoming reporting challenges and improving storytelling. It will help reporters stay on top of breaking issues through its email newsletter and website, and create a network of reporters covering the beat. The Ravitch Program is funded by generous grants from Richard Ravitch, long-time New York civic leader, and the Laura and John Arnold Foundation.

NEXT WEEK LONG SESSION BEGINS JULY 30

The next full week Ravitch Program workshop will be the week of July 30 covering budgets, bonds, pensions, incentives and additional topics to be decided by the attendees. The program, held at the CUNY Graduate School in New Yorjk’s Times square, provides in-depth sessions on both concepts, data and reporting strategies. There is room for 20 reporters from outside New York and two or three more reporters from the New York area.

So, I’m not doing this – I’m not a reporter. I’m a commentator.

BUT.

They have a free online class!

Fiscal Reporting: The Eight-hour Boot Camp — I signed up for that, because I want to see what they’re teaching.

I like the look of this:

Chapter 3: Pensions and Other Retirement Obligations

• Why Pensions Are Important
• How Pensions Work
• How Many People Receive Pensions?
• Key Terms and Concepts to Master
• Why Pensions Are in Crisis
• The Case for Public Pensions
• How Governments Cheat on Pensions
• Pension Fund Investments
• Retiree Health-Care Obligations

AW YEAH. Anybody can sign up (and I did.)

You know what I’m doing during my short Easter holiday….

Here’s a course description:

COURSE DESCRIPTION

Budgets, municipal bonds and pensions affect everyone’s wallet and every state and local government in America. This course delves into how state and local governments succeed and fail when they spend money to provide for the people. The four-chapter course starts with governments’ revenue and expenses and the factors that determine a state or locality’s fiscal health. It explains how governments finance infrastructure and provides an in-depth examination of the pension burden that is crippling many governments. The last chapter provides resources and sourcing ideas for any watchdog looking to inform the public about issues that may seem esoteric and opaque.

This online version of the CUNY Graduate School of Journalism’s Ravitch Fiscal Reporting Program includes a video conversation about these essential issues with professor and business columnist Greg David and civic leader and former New York Lt. Gov. Richard Ravitch. The course should take a single training day to complete.

Reporters who complete the course will be able to:

Analyze a state or locality’s budget
Identify the most common types of red flags and gimmicks
Learn which banks and law firms do bond business with their state or locality
Track a state or locality’s debt service and pension obligations
Gain nonpartisan economic and other fiscal information for any area
Outline what risks may be affecting a state or local government’s fiscal health
Find the key costs and sources of revenue for any state or local government

I like the look of this.

CHRIS TOBE ON TRANSPARENCY

In the online magazine, Transparency Times: (page 8)

Secret no-bid contracts

BY CHRIS TOBE CFA | FOUNDER OF STABLE VALUE CONSULTANTS

Hundreds of contracts for investment managers at large US public pension plans are kept secret. They are too secret for trustees to see, they are too secret for legislators to see, and they are even too secret for the State Auditor to see.

They are exempted from Federal Pension law (ERSIA) so must rely on state oversight. Most of these secret contracts are also exempt from competitive bidding. The majority of investment fund providers in US public pensions are now hired in secret no-bid contracts.

This is obviously a situation ripe for corruption.

There is no excuse for these arrangements – they are sold as being a way to get access to supposedly “high alpha” investments, but it hasn’t really panned out that way.

See David Sirota’s work in this area, with respect to New Jersey pensions.

DIVESTMENT HERO

No, it’s not what you think (or maybe it is.)

Guns and gas investments prompt CalPERS bid by police union leader

A series of calls demanding that California public pension funds pull their money out of divisive industries such as guns and fossil fuels is stirring opposition that could lead to a contentious election for seats on the CalPERS Board of Administration this year.

Treasurer John Chiang, a member of the CalPERS board, put forward the most recent divestment request last week, urging the fund to withdraw its investments from national retailers that sell guns that are illegal in California.

This week, a Southern California police officer who scolded Chiang during his presentation pulled papers to run for a seat on the board. Jason Perez of the Corona Peace Officers Association says he’s motivated to run for the board because he worries that social and environmental concerns are causing the fund to miss out on revenue.

“The reason I’m doing this is I’m selfish; I want to retire,” Perez said.

YEAH!

via GIPHY

Thank goodness somebody is thinking about what the pension funds should be doing.

Let’s see if he had more to say.

Perez’s union has been a regular presence at CalPERS since environmental activists last year urged the board to divest from the controversial Dakota Access Pipeline. Another failed proposal in the Legislature would have had CalPERS divest from companies that work on President Trump’s proposed border wall.

Those proposals worried retirees and may have played a role in the December CalPERS election in which school district administrator and divestment critic Margaret Brown unseated incumbent Michael Bilbrey. Perez’s union endorsed Brown.
…..
CalPERS generally opposes divestment, viewing it as a practice that increases overall risk. Sometimes the Legislature forces its hand, such as the 2015 law that nudged CalPERS to divest from coal.

Chiang wanted CalPERS to follow up on a letter he wrote in October urging it and the California State Teachers’ Retirement System to consider divesting from national retailers that sell weapons that are illegal in California.

……
Perez at last week’s meeting icily told Chiang that the treasurer had manufactured a political “stunt.” Several others who addressed the board in favor of divestment lost loved ones in the December 2015 San Bernardino massacre, including a retired California Highway Patrol lieutenant.

Perez called their remarks heartfelt, but considered the discussion to be irrelevant at CalPERS because it did not relate to improving the health of the pension fund.

“I couldn’t sleep the night before or the night after because I had to say those words in front of that board and those victims’ families. We’re neighbors to San Bernardino,” he said.

By a 9-3 vote, the CalPERS board rejected Chiang’s request. The majority of board members said the gun retailers’ concessions showed that CalPERS had already made a difference. Mathur voted against the gun divestment proposal.

Well, at least the Calpers board in general does know its fiduciary duty. I want to be fair: Calpers and Calstrs boards do tend to point out divestment policies are a bad idea. (But they do seem to get involved in stuff that’s pretty clearly politically-motivated investing, so I’m not giving them a total pass.)

Now, the public union members need to get the public to stop voting for these people passing divestment laws in the legislature.

The whole point here — with reporters who can understand what official financials mean and what is actually meaningful as a story, public employees who can see what large $$ deals are being made in their names, and pension board members who know what fiduciary duty is… and stick to it. These are all important.

RECENT PENSION POSTS

No, not mine — some pension- and retirement-related posts I found interesting this past week. This isn’t about governance/oversight, just a potpourri of interesting stuff:

• Jane the Actuary: The Curious Case Of Sergio/a, The Argentinian Pensioner – an Argentinian man officially changed his gender so he could receive a pension 5 years earlier.
• Wirepoints: Illinois state pensions: Overpromised, not underfunded – Wirepoints Special Report — when I looked at this sort of thing in my pension cash flow simulation, I noticed the high rate of increase for various plans, too.
• California Policy Center: Will the California Supreme Court Reform the “California Rule?” – Latest Update
• American Enterprise Institute: Automatic Adjustments Within Entitlement Programs: A Look at the Swedish Pension Reform Model
• National League of Cities: What Cities Are Doing About Pensions

See ya later!

via GIPHY