pensions

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CalPERS reported to be planning to cut its assumed investment return to seven and half

Byuclafaculty

Pension funds, such as UC’s, use an assumed rate of return to estimate future earnings and calculate their unfunded liability. In the past, UC has had the most conservative rate of 7.5% as compared with CalPERS and CalSTRS. It was useful for UC to be able to note that it was more conservative than the others. Now it is reported that CalPERS will cut its assumed rate to the same level as UC, i.e., CalPERS will assume that for each dollar in the fund, it can earn seven and a half cents. Although there is no direct effect on UC…

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Prius Public Pensions?

Byuclafaculty

An earlier post noted the ongoing negotiations between Governor Brown and certain GOP legislators as he tries to get a couple of Republican votes for his budget proposal. A 2/3 vote in the legislature is needed to put the governor’s tax extensions on the June ballot and at the moment he doesn’t have 2/3. (As previous posts have also noted, there might be a technical work-around the 2/3 rule, but is is more technical than practical.) One of the items for which Republicans are holding out is what is termed a “hybrid pension.” This notion surfaced as part of the…

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Regents Ponder Questions (With the aid of a management consultant)

Byuclafaculty

At the upcoming Regents session scheduled for the Ides of March, the Regents have invited a management consultant to help them ponder questions such as those below: * How can a more diverse student body be supported during a period of flattening or declining federal/or state appropriation? * How do we attract target students with the capacity to provide competitive tuition subsidization that is competitive with peer institutions? * Is the University effectively evaluating alternatives to traditional education practices (e.g. three year degrees, a multi-year tuition schedule) to help address student access and affordability issues? * How robustly is the…

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How Now Brown Budget? The Clock is Ticking

Byuclafaculty

As previous posts have noted, Gov. Brown needs a 2/3 vote to put his tax extension proposals – which are an integral part of his budget plan – on the ballot by June. (The current fiscal year ends June 30.) It is unusual for a governor to testify before a legislative committee but he did so yesterday. Most of the testimony was in fact aimed at legislative Republicans who have made no-tax-increase pledges. A video of the testimony from the Sacramento Bee is below. The references to dispensations and vows refer both to the pledges and the governor’s Jesuit background….

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Little Hoover Now Bigger: Pension Report Released

Byuclafaculty

It is going to take awhile to work through the full 100+ page report of the Little Hoover Commission on public pensions. See the previous post on this blog. However, UC is included in the report although much of the attention is on CalPERS, CalSTRS, and other plans. Below is a quote about UC: “The University of California system also maintains its own retirement plan, independent of the parameters set by the state for other pension plans. The state does not contribute directly to the UC pension program. For 20 years, the UC pension plan was funded entirely by investment…

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Little Hoover is Coming

Byuclafaculty

On the left, you see Herbert Hoover as a young child. Relevance? It is reported in today’s Sacramento Bee that the state’s Little Hoover Commission will be issuing a report on public pensions in California. The State Worker: New debate looms on public pensions Feb. 24, 2011, Jon Ortiz Get ready for a new round of debate over public pensions that could shape California’s intensifying budget talks and even wind up putting some sort of rollback on the legislative agenda. The bipartisan Little Hoover Commission plans to release a report today on California’s public pensions, complete with suggested changes. …The…

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Gov. Brown Removes Controversial “Stanford Study” Author From CalSTRS Board

Byuclafaculty

Readers of this blog will know of the so-called “Stanford Study” which was designed to produce the largest possible estimate of the unfunded liability of the three major state pension funds: CalPERS, CalSTRS, and UCRS. Money & Company blog, LA Times Governor pulls two teachers pension fund appointees (excerpt) February 22, 2011 Gov. Jerry Brown has pulled back two controversial, last-minute appointments made by then-Gov. Arnold Schwarzenegger to a state teachers pension board. On Dec. 31, Republican Schwarzenegger named Steven Kram, 54, of Los Angeles and Cameron Percy, 26, to the California State Teachers’ Retirement System, a $150-billion pension system.Kram…

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Harmonic Disturbance: Harman’s Pension Bill Explicitly Includes UC

Byuclafaculty

SENATE BILL No. 689 Introduced by Senator Tom Harman (R-Huntington Beach) February 18, 2011 An act to add and repeal Section 7503.1 of the Government Code, relating to public retirement systems. Legislative counsel’s digest: SB 689, as introduced, Harman. Public retirement systems. Existing law requires all state and local public retirement systems to prepare an annual report in accordance with generally accepted accounting principles. The bill would, until January 1, 2016, require all state and local public retirement systems to file an annual report with the Legislature, the Department of Finance, and the Legislative Analyst’s Office that would include specified…

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Presidents Day Report: Party of Lincoln Pushes Change in Public Pensions to Defined Contribution

Byuclafaculty

As we have noted repeatedly, it’s potentially not over with regard to the UC pension. A ballot proposition could easily override the Regents’ action that was taken last December. The article below notes that pensions have become the negotiating point on the state budget and getting the governor’s proposed tax extensions on the ballot. Brown’s Countdown, Day 43: State pension cuts pushed (excerpts) Kevin Yamamura, Sacramento Bee, Feb. 21, 2011 Former Gov. Arnold Schwarzenegger hailed pension cuts last year as a major reform after Democrats and state worker unions agreed to concessions that ended a record-long budget stalemate. But Republican…

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“It Ain’t Over ‘Til It’s Over” May Apply to the UC Pension

Byuclafaculty

In previous posts on this blog, we kept you informed on the various steps up to the pension changes adopted by the UC Regents last December. But we have also noted that what the Regents did may not be the final word. There could be an initiative on the ballot that would override what the Regents did, sweeping UC into some general state/local pension changes. Most recently, the Legislative Analyst indicated the state might aid UC’s pension funding – but for a price involving some further changes. See the earlier post on that development. In this post, two reports are…