Month: April 2021

Expose at Pennsylvania’s Biggest Public Pension Fund Reveals Lavish Private Equity Travel, But Misses How It Serves as a Bribe

Mary Pat Campbell
Expose at Pennsylvania’s Biggest Public Pension Fund Reveals Lavish Private Equity Travel, But Misses How It Serves as a Bribe

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Excerpt:

The article points out that the PSERS investment office regularly violates state travel policies, which require employees on Commonwealth business to hew to Federal guidelines for airfare and lodging. Eight PSERS officers have been granted waivers from this policy.

PSERS defends the travel costs by saying staff traveled business class and the fares were typically refundable and sometimes bought at the last minute.

My issue isn’t with the cost of the flights but their necessity, and with the hotel costs. Public servants should be staying in Westin/Marriott level rooms. These prices are consistent with five star hotels, like the Four Seasons or St. Regis in New York City.

Author(s): Yves Smith

Publication Date: 12 April 2021

Publication Site: naked capitalism

Pension debate could spur teachers, state employees to retire early

Mary Pat Campbell
Pension debate could spur teachers, state employees to retire early

Excerpt:

While many may be talking about early retirement, few are actually driving off into the sunset in their Overland campers — yet. According to figures provided by Pearce, about the same number of people put in for retirement during the first three months of 2021 as during January, February and March of last year.

But her office did see a “significant increase,” she said, in employees asking about how much it would cost them if they purchased enough retirement credits to exit the workforce early.

Author(s): Lola Duffort

Publication Date: 11 April 2021

Publication Site: VTDigger

Covid Madness: People Fleeing a Volcanic Eruption Can’t Board the Rescue Vessels Until Vaccinated

Mary Pat Campbell
Covid Madness: People Fleeing a Volcanic Eruption Can’t Board the Rescue Vessels Until Vaccinated

Excerpt:

The volcano on the Caribbean Island of St Vincent has erupted. Cruise liners and Ferries are rushing to the scene to evacuate people caught by the eruption – but people are not allowed to board the cruise liners until they receive a Covid vaccination.

….

In normal circumstances people are just evacuated from a deadly disaster zones, nobody refuses anyone because they might be sick. Sick people are given medical attention if required.

But because the world has become obsessed with a disease which kills up to 1% of victims, there is a real possibility that people fleeing a natural disaster will be told they have to stay and die, unless they receive an experimental and potentially life threatening medication.

As I said, not the rescuers fault – they are the meat in the sandwich. If they don’t insist on vaccination, their reward for compassion and heroism could be to be stuck in the ocean, nobody willing to take the evacuated islanders.

Author(s): Eric Worrall

Publication Date: 11 April 2021

Publication Site: Watt’s Up With That

Letter: Broken pension promise is not the Vermont way

Mary Pat Campbell

Link: https://www.reformer.com/opinion/letters/letter-broken-pension-promise-is-not-the-vermont-way/article_dd4a1b82-961b-11eb-933c-53c098d6616a.html

Excerpt:

Editor of the Reformer: As we all know, the state pension problem has been festering for years now. Governors, legislators, state treasurers and Pension Investment Committee members have come and gone without a suitable resolution. Kicking the can down the road, mostly driven by politics and simple indifference. Both the state employees and Vermont tax payer deserve a permanent solution to this problem now.

Thanks to the state treasurer who strongly flagged the problem again with some specific recommendations.

…..

At this point we know what the governor does not want, but what is his version of the solution? The governor has watched this for nearly six years. I would hope he would have been investigating and drafting a set of solutions from his perspective. The governor has at his call a strong financial leadership team and executive staff who are well positioned to develop an informed detailed solution. It is time he shares his solution with the legislature, his state employees and all Vermonters.

Author(s): Bob Zeliff

Publication Date: 11 April 2021

Publication Site: Brattleboro Reformer

Look Ahead, Vermont: Pensions, Act 250 reform, and what’s in a name?

Mary Pat Campbell

Link: https://www.reformer.com/look_ahead_vermont/look-ahead-vermont-pensions-act-250-reform-and-whats-in-a-name/article_5e64cade-9ae3-11eb-906e-3f0b80878609.html

Excerpt:

The high drama might be over for a while, but pension reform remains a high priority in the Legislature.

This week, the House Government Operations Committee is considering a new draft proposal to expand the membership of the Vermont Pension Investment Committee (VPIC) and establish a task force to study possible solutions to the state’s thorny unfunded pension liability problem.

This is the other shoe from House leadership’s decision two weeks ago, under pressure from state employee unions, to focus on governance now and study the solutions to unfunded liability over the summer. The unions had widely panned the initial proposal for reform as forcing them to work longer, pay more, and get less.

That liability is estimated at $5.6 billion, with about $3 billion in pension benefits and another $2.6 billion in health and other benefits for retirees.

As a committee draft proposal, it doesn’t have a bill name. That makes finding it on the relevant committee page a little more challenging. In this case, if you go to the documents tab on the Government Operations page there’s a “pensions” folder. Click on that, and on “bills,” and there you will find “21-0967 — An act relating to the membership and duties of the Vermont Pension Investment Committee and the creation of the Pension Design and Funding Task Force.”

Author(s): Greg Sukiennik

Publication Date: 11 April 2021

Publication Site: Brattleboro Reformer

PSERS and its troubles: A guide to the woes facing Pa.’s biggest pension plan

Mary Pat Campbell

Link: https://www.inquirer.com/business/psers-sers-pension-fbi-scandal-investigaton-teachers-20210411.html

Excerpt:

The board in December found that PSERS yearly investment returns had averaged 6.38% over the last nine years — just above the 6.36% threshold needed to avoid an increase in pension payments from 100,000 school employees hired since 2011.

In 2010, the state adopted a so-called “risk sharing” mandate that requires school staff to pay more, as taxpayers do, when PSERS investments underperform. The law mandated that the review in 2020 look at average returns over the past nine years.

Author(s): Joseph N. DiStefano, Craig R. McCoy

Publication Date: 11 April 2021

Publication Site: Philadelphia Inquirer

Public Pension Plans Are Thirsty for Liquidity

Mary Pat Campbell

Link: https://www.plansponsor.com/public-pension-plans-thirsty-liquidity/

Excerpt:

Chicago’s municipal pension plan recently redeemed $50 million from a large-cap equity fund. Seems like a non-event. Happens all the time. But the reason the pension plan did so is chilling: It was done specifically in order to make pension benefit payments. This should be a cautionary flag to underfunded pensions and to the state and municipal governments that sponsor them.

….

First, when pensions are underfunded they have a tendency (or need) to take on more risk in order to try to generate higher returns.

For example, underfunded pension plans are increasing their allocations to private equity. Nothing wrong with that. But that means more of the portfolio is illiquid. It would be very unlikely that private equity positions would be sold to “make payroll,” specifically because they are so illiquid. But this leaves fewer assets that are liquid enough to be sold, and that increases the pressure on those liquid assets to be sold at a decent price. Moreover, if the plan has significant assets in liquid securities, such as large-cap equities or Treasurys, those assets can easily be sold, but then the portfolio will be out of balance and will require additional trading and rebalancing anyway.

Secondly, the pension plan must keep more cash on hand than it otherwise would. If your policy portfolio calls for a 3% allocation to cash, that is designed for diversification and dry powder. But a pension plan sponsor should be providing significant amounts of cash into the pension each year. If the sponsor is not making its contributions, then the pension plan has to carry more cash than it otherwise would.

Author(s): Charles Millard

Publication Date: 7 April 2021

Publication Site: Plansponsor

Bhutan vaccinated almost all its adults against covid-19 in a week

Mary Pat Campbell

Link: https://www.economist.com/graphic-detail/2021/04/08/bhutan-vaccinated-almost-all-its-adults-against-covid-19-in-a-week

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Excerpt:


WHEN INDIA presented Bhutan with a generous gift of covid-19 vaccines in January, the neighbouring kingdom made an unusual choice. Rather than rushing to inoculate all 800,000 of its citizens, the government sought advice from the Zhung Dratshang, a body of Buddhist monks. The stars were not auspicious, they ruled. Better to wait two months, and then to make sure that the first dose be both administered by, and given to, women born in the Year of the Monkey.

So Bhutan waited until March 27th before Tshering Zangmo administered the first jab to Ninda Dema. The injection took place at a school in the capital, Thimphu, at the auspicious hour of 9.30am, after prayers were chanted and butter lamps lit. But then there was no dallying. Within a single week a world-beating 85% of Bhutan’s adult population had received a first shot. Only two countries, Israel and the Seychelles, have vaccinated a (slightly) higher proportion of people, but both took months to do so (see chart).

Publication Date: 8 April 2021

Publication Site: The Economist

Is the Great Stagnation Over?

Mary Pat Campbell
Is the Great Stagnation Over?

Excerpt:

Cowen cautioned that many technological advances would doubtlessly improve human welfare but still might not show up in U.S. gross domestic product (GDP) and productivity statistics. For example, the new plug-and-play vaccine platforms may well result in highly effective vaccines for malaria and HIV, and that would be a huge boon for millions of people living in poor countries, but those benefits would be unlikely to show up U.S. GDP per capita statistics. He also pointed out that the recent significant advances in green energy production are occurring chiefly as a way to avoid the possible catastrophe of man-made climate change. Because climate change is a hidden counterfactual, replacing fossil fuels with solar, wind, and batteries would not necessarily lead people to feel as though their standard of living had risen.

Strain countered that the toll that infectious disease takes on the stunting of talents and skills in poor countries would be greatly ameliorated by rolling out cheap effective vaccines now made possible by messenger RNA technology. Over a longer time horizon, the U.S. and the rest of the world would significantly benefit from efflorescence of invention and entrepreneurship arising in regions whose development is held back by prevalent plagues.

Author(s): Ronald Bailey

Publication Date: 7 April 2021

Publication Site: Reason

The big hole in America’s plan to fight Covid-19 variants

Mary Pat Campbell

Link: https://www.politico.com/news/2021/04/07/covid-variants-drug-manufacturing-479902

Excerpt:

Vaccine makers like Pfizer, Moderna and Johnson & Johnson coped with intense global demand for their original shots by manufacturing millions of doses while the vaccines were still in clinical trials. But that is not an option now, because the companies are still racing to fulfill orders for their existing Covid-19 vaccines — and some, including Johnson & Johnson and AstraZeneca, are struggling with major production setbacks. Pumping out second-generation shots would require factories to switch over manufacturing lines now used for the first wave of vaccines, and in some cases fire up new production processes.

The potential manufacturing gap is the latest challenge to President Joe Biden’s promise to bring the pandemic to a close. South Africa has already rejected AstraZeneca’s vaccine because an early trial showed it wasn’t effective against the B.1.351 strain that dominates there and has now reached the United States. Another variant spreading in America — P.1, first found in Brazil — has raised similar concerns about its ability to evade some of the vaccines now in use globally. Biden administration officials are working overtime to understand how the variants’ spread could alter vaccination strategies. But the lack of manufacturing capacity is limiting America’s options.

Author(s): SARAH OWERMOHLE

Publication Date: 7 April 2021

Publication Site: Politico

The effects of Black Lives Matter protests

Mary Pat Campbell

Link: https://www.vox.com/22360290/black-lives-matter-protest-crime-ferguson-effects-murder

Paper link: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3767097

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Excerpt:

From 2014 to 2019, Campbell tracked more than 1,600 BLM protests across the country, largely in bigger cities, with nearly 350,000 protesters. His main finding is a 15 to 20 percent reduction in lethal use of force by police officers — roughly 300 fewer police homicides — in census places that saw BLM protests.

Campbell’s research also indicates that these protests correlate with a 10 percent increase in murders in the areas that saw BLM protests. That means from 2014 to 2019, there were somewhere between 1,000 and 6,000 more homicides than would have been expected if places with protests were on the same trend as places that did not have protests. Campbell’s research does not include the effects of last summer’s historic wave of protests because researchers do not yet have all the relevant data.

Author(s): Jerusalem Demsas

Publication Date: 9 April 2021

Publication Site: Vox

Chile’s Labor Minister Zaldívar resigns over pension reforms

Mary Pat Campbell

Link: https://en.mercopress.com/2021/04/08/chile-s-labor-minister-zaldivar-resigns-over-pension-reforms

Excerpt:

Chile’s Labor Minister María José Zaldívar submitted her resignation Wednesday to President Sebastián Piñera, who accepted it and announced he would appoint Deputy Patricio Melero to succeed her.

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Zaldívar’s intentions to leave her job were no surprise as the pension reform failed to go her way. ”I highlight her tireless effort to carry out the reform of the pension system to improve the benefits of millions of current and future pensioners and lay the foundations for a fairer, more supportive pension system with better pensions,” said Piñera.

But Senate Speaker Adriana Muñoz of the opposing Party for Democracy (center left), expressed her dissatisfaction: “It seems complex to me to continue holding this debate with a government that changes our interlocutors every three months.”

Publication Date: 8 April 2021

Publication Site: MercoPress