Employee Pension Fund Liabilities are determined how ???
Oct 21, 2017 23:48:22 #
CAFR1 NATIONAL POST
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Liabilities??? Hmmm, how are they determined???
Rebecca:
The changes to GASB accounting standards over the last decade or so allow for:
1. "projecting" out up to 35-years liabilities as if due today.
On this point, what the pension fund systems are doing is looking at each participant and projecting what they will be making at retirement.
EXAMPLE: The employee making $35,000 today, at retirement 30-years from now with raises; cost of living increase expenses; etc., will be making say $225,000. So with most getting 80% of what they retire at $225,000 at 80% = ($180,000) and with the fund say using an actuarial return projection of 5%, that means the allocation from the fund to cover that "one" employee would be: at a 5% return to equal $180,000 equals $3,600,000 allocated for that one employee.
I note the employee does not own 1c of that allocation.
They just have in so many words a "ticket to ride" under contract for payouts from the fund.
The local governments participating owns 100% of their share in the fund's balance.
If a local government were to lay of half of employees during one year (their 5-year or less ), POOF, about half of the fund balance just from the local government's participation freed up and the over-funded portion is available for withdraw.
On the other hand, if after the local government was refunded and two-years latter the same local government hired the same amount of employees they laid off previously, snap, "significantly underfunded!"
A close look needs to be made of what transpired in 2008 when CA local governments laid off tens of thousands of employees and then rehired them a few years latter....
Pension funds create a "Parking Zone" for wealth held by a local governments. The bigger the fund balance, the bigger their wealth base held. Additionally every fund is a power base. Where those funds are invested can make or break any business venture globally.
So, the "Bottom Line" here is: If pensions were a "cash and carry" (all "current" liabilities were paid by the fund ongoing), they all are 100% + funded!
To promote "underfunded" without qualifying how the game is being played plays right into the local government's and "Pension System" wealth building scheme to the detriment of the entire US tax-paying population's interests.
Keep in mind most government employees do not know this is being done either.
Please share my complete comments with your email list and post to chat boards that are discussing the topic.
Sent FYI from,
Walter Burien - http://CAFR1.com and http://TRFA.us
P. O. Box 2112
Saint Johns, AZ 85936
____________________
Liabilities??? Hmmm, how are they determined???
Rebecca:
The changes to GASB accounting standards over the last decade or so allow for:
1. "projecting" out up to 35-years liabilities as if due today.
On this point, what the pension fund systems are doing is looking at each participant and projecting what they will be making at retirement.
EXAMPLE: The employee making $35,000 today, at retirement 30-years from now with raises; cost of living increase expenses; etc., will be making say $225,000. So with most getting 80% of what they retire at $225,000 at 80% = ($180,000) and with the fund say using an actuarial return projection of 5%, that means the allocation from the fund to cover that "one" employee would be: at a 5% return to equal $180,000 equals $3,600,000 allocated for that one employee.
I note the employee does not own 1c of that allocation.
They just have in so many words a "ticket to ride" under contract for payouts from the fund.
The local governments participating owns 100% of their share in the fund's balance.
If a local government were to lay of half of employees during one year (their 5-year or less ), POOF, about half of the fund balance just from the local government's participation freed up and the over-funded portion is available for withdraw.
On the other hand, if after the local government was refunded and two-years latter the same local government hired the same amount of employees they laid off previously, snap, "significantly underfunded!"
A close look needs to be made of what transpired in 2008 when CA local governments laid off tens of thousands of employees and then rehired them a few years latter....
Pension funds create a "Parking Zone" for wealth held by a local governments. The bigger the fund balance, the bigger their wealth base held. Additionally every fund is a power base. Where those funds are invested can make or break any business venture globally.
So, the "Bottom Line" here is: If pensions were a "cash and carry" (all "current" liabilities were paid by the fund ongoing), they all are 100% + funded!
To promote "underfunded" without qualifying how the game is being played plays right into the local government's and "Pension System" wealth building scheme to the detriment of the entire US tax-paying population's interests.
Keep in mind most government employees do not know this is being done either.
Please share my complete comments with your email list and post to chat boards that are discussing the topic.
Sent FYI from,
Walter Burien - http://CAFR1.com and http://TRFA.us
P. O. Box 2112
Saint Johns, AZ 85936
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