RSS Lifestyle – Living

Largest Public Pensions Face $2 Trillion Hole, Moody’s Says

26/09/2014

seniorsThe 25 largest U.S. public pensions face about $2 trillion in unfunded liabilities, showing that investment returns can’t keep up with ballooning obligations, according to Moody’s Investors Service.The 25 biggest systems by assets averaged a 7.45 percent return from 2004 to 2013, close to the expected 7.65 percent rate, Moody’s said in a report released today.

Yet the New York-based credit rater’s calculation of liabilities tripled in the eight years through 2012, according to the report.

“Despite the robust investment returns since 2004, annual growth in unfunded pension liabilities has outstripped these returns,” Moody’s said. “This growth is due to inadequate pension contributions, stemming from a variety of actuarial and funding practices, as well as the sheer growth of pension liabilities as benefit accruals accelerate with the passage of time, salary increases and additional years of service.”

U.S. states and cities are contending with underfunded worker retirement systems. The 18-month recession that ended in June 2009 wiped out asset values and forced cuts to contributions. Now, liabilities are crowding out spending for services, roads and schools.

Conservative Calculations

The largest systems included in the Moody’s report manage about 40 percent of the $5.3 trillion in U.S. public pensions. They include the California Public Employees’ Retirement System, the California State Teachers’ Retirement System and the New York State and Local Employee Retirement System. The New York plan had the best 10-year average return among the 25 systems, at 8.67 percent.

In April 2013, Moody’s announced it would take a more conservative approach to calculating liabilities than states and cities, such as by using market-based discount rates to “capture both the top-line liability growth and the material decline in interest rates.” Moody’s latest estimations of pension liabilities are higher in every case than those reported by the systems.

It put 29 local governments on review for downgrade as a result. Three months later, it dropped Chicago’s rating three levels because it has the largest pension burden among the most-indebted localities.

The only two bright spots among the 25 largest pensions are the Tennessee Consolidated Retirement System and Wisconsin Department of Employee Trust Fund, which had muted growth in unfunded liabilities, according to Moody’s.


Comments are closed.

 

Listen our radio online in China www.oraia.cn,Europe www.oraiatv.com

“Oraia” Radio,News & Lifestyle,the online home in China & Europe of a original audio content produced by the staff of Oraia,with the latest features, programs, news, audio, podcasts, events, photos.Night Time our Entertainment Program with the Latest Tracks.

Pentagon’s ‘lost’ trillions went to people connected to US military-industrial complex

Former Republican congressman and presidential candidate Ron Paul has said that “the Pentagon’s lost trillions have nothing to do with defense, adding that the “money propping up the high lifestyles of those connected to the military-industrial complex.” Dr. Paul, a three-time American presidential candidate and the founder of the Ron Paul Institute for Peace and Prosperity, made the remarks in an article published by his website on Monday. Deputy US Secretary of Defense Patrick Shanahan has recently acknowledged that the Pentagon has failed its first-ever comprehensive audit, saying, “We failed the audit, but we never expected to pass it.” “It was an audit on a $2.7 trillion dollar organization, so the fact that we did the audit is substantial,” Shanahan claimed. The first-ever audit of the of the $2.7 trillion enterprise that is the Pentagon identified widespread problems in cybersecurity, but found little in the way of savings that could offset potential budget cuts next year, according to officials. Pentagon’s comptroller David Norquist, who has played a key role in the audit, said after the report release that although no glaring instances of fraud were detected in the US military establishment, its Army, Navy, Air Force, Marines, Special Operations and the Transportation Command all received failing grades.

“The Outlook For The Global Economy Has Deteriorated”: Oil, Copper And Lumber

Oil, copper and lumber are all telling us the exact same thing, and it isn’t good news for the global economy. When economic activity is booming, demand for commodities such as oil, copper and lumber goes up and that generally causes prices to rise. But when economic activity is slowing down, demand for such commodities falls and that generally causes prices to decline. In recent weeks, we have witnessed a decline in commodity prices unlike anything that we have witnessed in years, and many are concerned that this is a very clear indication that hard times are ahead for the global economy. Let’s talk about oil first. The price of oil peaked in early October, but since that time it has fallen more than 25 percent, and the IEA is warning of “relatively weak” demand out of Asia and Europe…

Amazon Rolling Out ‘Amazon Pay’ Digital Wallet In Physical Stores

As FAANG stocks lead the market lower during what has become a relentless Q4 selloff, Amazon is hoping to reassure anxious investors that the company's relentless expansion and revenue growth will continue. To wit, the company is taking another big step toward establishing itself as the American WeChat or Alipay as it seeks to become the dominant player in electronic consumer payments in the US and beyond. According to the Wall Street Journal, the e-commerce giant is hoping to undercut Apple's Apple Pay by persuading more brick-and-mortar merchants to accept its Amazon Pay digital wallet. As it tries to build a foothold in payments outside of its Amazon Go stores, the company is reportedly focusing on building partnerships with restaurants and gas stations (businesses that have yet to be scalped by the Bezos revenue-absorption machine). To entice owners to give Amazon Pay a try, the company is dangling what appears to be a pretty enticing carrot: Amazon is promising to lower processing costs at a time when so-called "interchange" fees charged by Visa and MasterCard have been rising.

YouTube Lets California Fire Conspiracy Theories Run Wild

The Camp Fire in California has killed at least 79 people, left 699 people unaccounted for, and created more than a thousand migrants in Butte County, California. In these circumstances, reliable information can literally be a matter of life death. But on YouTube, conspiracy theories are thriving. Currently, when a user starts typing “California fire” into YouTube, the top autocomplete search suggestions are “conspiracy 2018,” “agenda 21,” and “laser beam,” all of which refer to conspiracy theories related to California’s wildfires. Similarly, typing in “California wildfire” leads YouTube to suggest “lasers,” “directed energy weapon,” and “dew,” which is an acronym for “directed energy weapon.” Simply typing “California fire” and searching it does return straightforward news coverage, which is an improvement over, say, the false flag and crisis actor conspiracies YouTube was surfacing about the Marjorie Stoneman Douglas High School mass shooting earlier this year. Believers of this false California wildfire conspiracy theory think that the US government shoots directed energy weapons, or lasers, from a plane in order to to start fires at predetermined targets. The goal of this attack, which is not actually happening, is to support a bastardized interpretation of “Agenda 21,” a sustainable development plan developed by the United Nations in 1992. This conspiracy theory also gained a little bit of traction on Twitter. The conspiracy theorists use doctored or out-of-context images in order to falsely argue that directed energy weapons, or laser beams, caused the wildfires in California—not climate change. By incorrectly claiming that the houses were consciously struck, these theorists ignore ecological science which explains that the arrangement of homes and topography of the land