Thursday, July 18, 2013

Who is the Common Denominator?

Interim CAO Castille is a Director of the Leroy Collins Institute.

The LeRoy Collins Institute is a nonpartisan, statewide policy organization which studies and promotes creative solutions to key private and public issues facing the people of Florida and the nation. The Institute, located in Tallahassee at Florida State University, is affiliated with and works in collaboration with the State University System of Florida.

http://collinsinstitute.fsu.edu/content/colleen-castille

The Institute did a research paper on municipal pensions in Florida.

http://collinsinstitute.fsu.edu/sites/collinsinstitute.fsu.edu/files/TaxWatch-LCIMuniPensionsFINAL.pdf

The report is an interesting read (really) and is kind of a road map as to how Pensacola got where it is today.

It examines four main issues often cited as causes for local pension underfunding: Mismanagement of the pension fund, chapter 175 & 185, “gaming” of the benefit calculation such as spiking, and the inability for localities to change contracts with unions prior to their expiration.

Of particular note is the mismanagement note which states:

Mismanagement of local pension funds can occur through, among other things:

a) “pension holidays;” b) financial firms investing assets in a way that brings a minimal return on investment; and c) incorrect analysis in actuarial assessments.

“Pension holidays” are occasions when a city did not contribute to the pension plan. This was especially evident during times when investments were gaining a large rate of return and thus municipalities thought they did not need to contribute to the pension fund.

The report adds:
While it is difficult to know if the actuarial assessment of a pension fund is on target, miscalculation of expected returns and demographic trends of the system could lead to significant consequences relating to the level of funding.

Sound familiar Dick?

Colleen meet Dick.

Dick is the City CFO.
Dick is the Police pension administrator.
Dick is the General pension administrator.
Dick is the Fire pension administrator.

Dick has some issues with the State on his plans assumptions.

Colleen can you explain to Dick the meaning of Conflict of Interest.  Ask him who he serves - the Plan's or the City.





5 comments:

Anonymous said...

The biggest problem with the Police and General pension plans is the CITY STAFF agreeing and COUNCIL implementing benefit large benefit increases without employees helping to pay for them. The general 1997 re-opening was the biggest mistake. The police increasing the benefit by 50% and the taxpayers footing the bill.

Anonymous said...

Maren - you had me up until the part where you make the pension issue personal. I really want to believe your claims that the blog is an altruistic endeavor and just when I do you go and lob a grenade at Barker, Hayward, Outzen or Asmar. Just the facts please - I can draw my own conclusions.

Maren DeWeese said...

Fact: Dick is the City CFO.
Fact: Dick is the Police pension administrator.
Fact: Dick is the General pension administrator.
Fact: Dick is the Fire pension administrator.

Fact: Based on the States failure to accept the Police pension rates of return, either the City is going to have to make up the State's Share or the participants will have to pay more.

Fact: As CFO, Barker has a responsibility to the City and the Citizens to do what is in the best interest of the City.

Fact: As Plan Administrator, Barker has a responsibility to the Plans to do what is in the best interest of the Plans.

Fact: In the current situation, Mr. Barker has a conflict of Interest.

Where's the grenade?

Anonymous said...

How can an employee be the plan administrator?
Isnt that a clear conflict???

Anonymous said...

Fact - Jeff Deweese recommended that Dick Barker be fired as city CFO to the Hayward transition team the day after the last mayoral election. Do you really want to go down this road?