California’s Pension Woes Are Made Worse By Moving Emergency Services In House

Link: https://www.forbes.com/sites/ikebrannon/2021/02/28/californias-pension-woes-are-made-worse-by-moving-emergency-services-in-house/?sh=40f419203629

Excerpt:

However, there is no significant budgetary reform in the offing, and California’s cities and counties feel no compunction to address the issue. In fact, these days several municipalities are taking steps that will ultimately serve to exacerbate the shortfall by bringing in all of their emergency services “in house,” rather than contracting out emergency services to a private entity. 

The rationale typically given for such steps is that doing ambulance and fire services completely in house helps coordinate emergency responses and creates efficiencies, improving services and saving them money. 

However, such efforts rarely manage to help towns—or the state, for that matter—to save money. Contracting out ambulance services is typically done by smaller communities that don’t have the demand to support a full-time ambulance crew, which can be expensive—a tricked-out ambulance alone costs over $150,000. Combining with another nearby community generates economies of scale. 

Author(s): Ike Brannon

Publication Date: 28 February 2021

Publication Site: Forbes

State Employee Retirements at CalPERS Jump 15% in 2020

Link: https://www.ai-cio.com/news/state-employee-retirements-calpers-jump-15-2020/

Excerpt:

California state employee retirements jumped 15% last year, as employees dealing with pandemic-related stress chose to leave the workforce, a pension fund spokesperson with the California Public Employees’ Retirement System (CalPERS) confirmed. 

About 12,300 state workers in the state retirement system retired last year, up from roughly 10,700 the year prior, according to CalPERS data, which was first reported on by the Sacramento Bee. It’s a major spike from the prior two-year period, when state retirements fell 1.8% from 2018 to 2019. 

Overall, retirements in the entire CalPERS system—which includes state workers, as well as public agency employees and non-teaching school personnel—increased just 4% in 2020, data shows. The prior year, the number of retirements in the whole pension fund fell 1.4%. 

Author(s): Sarah Min

Publication Date: 23 February 2021

Publication Site: ai-CIO

Push for pension reform rocks teachers

Link: https://www.ptreyeslight.com/article/push-pension-reform-rocks-teachers

Excerpt:

Teachers are upset at the Marin County Board of Education for discussing pension reform in the middle of a pandemic without any feedback from labor unions. The county board considered a resolution last month that calls on state legislators to enact pension reform, proposing several possible solutions—including weakening pensions by reducing benefits and raising the retirement age. Teachers spoke out against the nonbinding resolution, which was tabled in response to their concerns.

…..

School districts and employees have no say in how much they pay. At Shoreline, about 10 percent of the general fund is paid to retirement funds. 

The required contribution from districts has steadily risen following the passage of A.B. 1469, which was intended to fully fund CalSTRS. When the bill passed in 2014, the state required districts to pay 8.88 percent of their payroll to the teachers’ retirement system. This year, they are required to pay 16.15 percent. Mandated CalPERS contributions have risen from 11.77 to 20.7 percent of payroll costs in the same timeframe, leaving less money within districts for direct education costs. 

The rising liability caught the eye of the Joint Legislative Advisory Committee, a countywide group of elected school board members and superintendents created to advocate on behalf of public education in Marin. Pension reform has been a priority for the committee since 2014, and it’s been the number-one goal since 2017. 

Author(s): Braden Cartwright

Publication Date: 3 February 2021

Publication Site: Point Reyes Light

CalPERS seen weighing proposal on rule changes for hiring, firing of CIO

Link: https://www.pionline.com/pension-funds/calpers-seen-weighing-proposal-rule-changes-hiring-firing-cio

Excerpt:

The CalPERS board is looking at a change in the way it will decide who replaces Yu ‘Ben’ Meng as CIO of the fund.

CalPERS board is expected to weigh a move that would modify a recent governance change calling for the full board in conjunction with the CEO to hire, evaluate and terminate the pension fund’s CIO.

Author(s): ARLEEN JACOBIUS

Publication Date: 23 February 2021

Publication Site: Pensions & Investments

California pension funds learning from experience; Flexibility is key lesson from plans’ pandemic struggles

Link: https://www.pionline.com/pension-funds/california-pension-funds-learning-experience

Excerpt:

Marcie Frost said CalPERS got an early warning about the coronavirus from its outgoing CIO.


CalPERS and CalSTRS have been working to keep their plans upright and positioned to attain their expected rate of returns in unprecedented economic, social and political conditions.

Author(s): Arleen Jacobius

Publication Date: 25 January 2021

Publication Site: Pensions & Investments

Report: Riverside County’s pension liabilities high, but gap gradually closing

Link: https://www.desertsun.com/story/news/politics/2021/02/09/report-riverside-countys-pension-liabilities-high-but-gap-gradually-closing/4457794001/

Excerpt:

According to the report, the county’s retirement apparatus is now 71% funded, compared to 70% in January 2020.

Although the unfunded pension gap increased from $3.5 billion to $3.6 billion in that time, the total market value of the county’s assets also grew, from $8.1 billion to $8.8 billion, according to PARC.

….

If investment growth remains positive, and the county’s financial condition does not suffer from additional financial shocks like the one stemming from coronavirus, PARC estimated that the 80% funded status could be attained by 2027.

Author(s): City News Service

Publication Date: 9 February 2021

Publication Site: Desert Sun

Pension Funds Are Mixed or Mum on More Cash for Apollo

https://www.nytimes.com/2021/02/03/business/apollo-pension-funds.html

Excerpt:

California’s huge public retirement system, for one, offered only cautious support after new disclosures of financial ties between the firm’s chief, Leon Black, and Jeffrey Epstein.

When investors in Apollo Global Management learned last week that the firm’s chief executive had paid $158 million to the registered sex offender Jeffrey Epstein, they hardly blinked.

After the private equity firm announced the figure, revealed by an outside investigation, its stock rose nearly 7 percent. That was a far different response from three months ago, when shares plunged over concerns about the financial ties between Mr. Epstein and the chief executive, Leon Black.

…..

A more important test could come the next time Apollo seeks to raise money from the 1,500 pension plans, foundations, sovereign wealth funds and other institutions that invest with it. These limited partners fuel its ability to carry out corporate buyouts, extend loans to companies and make other investments.

So far, their response has been mixed. One of the biggest public pension plans in the United States — the California Public Employees’ Retirement System, or CalPERS — offered only cautious support.

Author: Matthew Goldstein

Publication Date: 3 February 2021

Publication Site: NY Times

CalPERS expecting to announce new CIO this quarter

Link: https://www.pionline.com/pension-funds/calpers-expecting-announce-new-cio-quarter

Excerpt:

Even as CalPERS officials were facing the dual challenges of managing investments and remote work during a pandemic, it was moving ahead with hiring a new CIO and expects to name one in the first quarter, a top official said.

Author: Arleen Jacobius

Publication Date: 25 January 2021

Publication Site: Pensions & Investments

CalPERS’ Former CIO on Saving America’s Public Pensions

Link: http://pensionpulse.blogspot.com/2021/01/calpers-former-cio-on-saving-americas.html

Excerpt:

Gordon thinks very highly of Ben Meng and so do I. I’ve had the pleasure of talking with him a few times since he was appointed CIO at CalPERS and not only is he brilliant, he was always very nice and generous with his time.

The last time I spoke with Ben was in the summer via a webcast where he explained that CalPERS is not leveraging its portfolio by $80 billion. We spoke about a few things and I recommend you read my comment here to gain an appreciation of everything he was tying to do at CalPERS.

That was before his crucifixion In August where he was forced to resign.  

I’m on record stating the way Ben Meng was treated was absolutely shameful and disgusting.

I don’t need to expand on this, suffice it to say CalPERS lost one of the best CIOs in the world and they still haven’t replaced him.

Author: Leo Kolivakis

Publication Date: 19 January 2021

Publication Site: Pension Pulse

Saving America’s Public Pensions

Link: https://www.project-syndicate.org/onpoint/public-pensions-how-to-increase-long-term-returns-by-ben-meng-2021-01?barrier=accesspaylog

Excerpt:

The main challenge facing the public pension industry is the high assumed rates of returns on pension assets relative to what equities or bonds are likely to deliver.Many US public pension funds expect a rate of return in the neighborhood of 7% per year. But in today’s capital-market environment, achieving that sustainably over the long term has become an increasingly daunting task.

In fact, this is not a new problem. As Chart 1 illustrates, the gap between the risk-free and assumed rate of return has been widening for the past four decades. In the1980s, the risk-free rate (as approximated by the yield for ten-year US Treasury bonds) was often far higher than the assumed rate of return, making it relatively easy for pension funds to hit their targets. Today, however, the risk-free rate is more than six percentage points below targeted return.

Author: Ben Meng

Publication Date: 15 January 2021

Publication Site: Project Syndicate