I look forward to Bob Walsh weighing in to tell us that the world is wrong and he is right, that if we would just ignore reality and use the "Walshian Assumptions" everything would be fine.
Perhaps he'll get Andrew to run his famous simulation again using the "Walshian Assumptions" so that he can point to it and say "see, IF the fund merely earns these returns, we can surely afford these unsustainable, unaffordable, bankrupting entitlements for my entitlement-minded flock".
To which we of course would say "yes Bob, and IF a frog had wings, it wouldn't bump its ass, you ass."
To which Bob would then say "OK, your not buying that? How about door #2, where we monetize the Lottery and we use the proceeds to fund the unsustainable, unaffordable, bankrupting entitlements of my entitlement-minded flock?"
To which we say "Bob, let us introduce you to Gina. Unlike some of your minions, she's not going to be fooled into using your screwy Walshian Assumptions" ...and the rest is history.
I guess RI and General Treasurer Gina Raimondo will have to take lessons from Hawaii how to wisely invest their retirement portfolio! I must also note, Hawaii unions sued in court to force State of Hawaii to contribute the required matching % funds into The State Employees’ Retirement System Pension Fund all the way up to the Supreme Court level and won!!!!
"Strong quarter lifts state pension fund by 8.3%
The ERS approaches its peak asset level as investors embrace risk once again
By Dave Segal
POSTED: 01:30 a.m. HST, May 16, 2012 Honolulu Star Advertiser
The state's largest public pension fund moved back into positive territory for the fiscal year as it soared 8.3 percent last quarter to boost its total assets to a near-record $11.5 billion.
(The following was a graphic chart in the newspaper article)
Tracking the Money
The State Employees’ Retirement System Pension Fund rose in third quarter 2012.
FY * 2012 3Q** Gain/loss +8.3% Total Assets (in Billions) $11.5
FY* 2012 2Q*** Gain/loss +5.5% Total Assets (in Billions) $10.7
FY* 2012 1Q****Gain/loss -11.2% Total Assets (in Billions) $10.2
FY* 2011……………Gain/loss +20.7%Total Assets (in Billions) $11.6
FY* 2010……………Gain/loss +11.7%Total Assets (in Billions) $9.8
FY* 2009……………Gain/loss -18.7%Total Assets (in Billions) $8.8
FY* 2008……………Gain/loss -3.4%Total Assets (in Billions) $10.8
FY* 2007……………Gain/loss +17.7%Total Assets (in Billions) $11.5
FY* 2006……………Gain/loss +11.1%Total Assets (in Billions) $9.9
FY* 2005……………Gain/loss +11.3%Total Assets (in Billions) $9.2
FY* 2004……………Gain/loss -15.8%Total Assets (in Billions) $8.6
FY* 2003……………Gain/loss +3.0%Total Assets (in Billions) $7.7
*Ends June 30 of each year; ** Ended March 31, 2012,
***Ended Dec, 31m 2011, ****Ended Sept. 30, 2011
Source: State of Hawaii Employee’s Retirement System Star-Advertiser
Hawaii's Employees' Retirement System's portfolio increased $814.4 million during the January-March period. Through the first nine months of the 2012 fiscal year, which ends June 30, the fund has earned a 1.4 percent return, according to a report issued Tuesday by Portland, Ore.-based Pension Consulting Alliance Inc., which advises the ERS board of trustees.
The ERS fund provides retirement, disability and survivor benefits to 111,648 active, retired and inactive state and county employees.
"This is one of the strongest quarters we've had recently, and the trustees were very pleased with this kind of performance and hope it continues," ERS Chief Investment Officer Rod June said.
"The (individual) managers' portfolios were structured in a way that they were able to outperform. This is a quarter where the managers who took risks were rewarded for that risk."
Equity markets turned in the strongest quarter since the initial rebound from the credit crisis in mid-2009, the report said.
"Investors once again embraced risky assets, as evidence of a sustainable economic expansion continued to mount," the report said. "Uncertainty regarding European banks and sovereign debt issues began to slowly subside due largely to the (European Central Bank's) efforts to ease funding and refinancing pressures."
The ERS performance beat the median 7.7 percent return of 26 public funds with assets of $1 billion or more. The ERS return also exceeded its policy benchmark —consisting of various index funds — of 7.5 percent.
It was the second straight positive quarter and the 10th gain in the past 12 quarters for the ERS fund. The peak level for assets was $11.7 billion on Sept. 30, 2007.
Still, Pension Consulting cautioned in its report that while economic data from the U.S. continue to improve, "rising oil prices and tax uncertainty could produce potential headwinds as politicians have yet to address pending tax hikes and spending cuts, both scheduled to take effect next year."
June also said he's concerned that problems in Europe, in particular Greece and Spain, could weigh heavily on the markets.
"I don't think that the trustees believe that the kind of quarter that we had in the first quarter is necessarily a trendsetter," June said. "We continue to manage the portfolio with caution and prudence."
Domestic stocks were the best performers in the ERS portfolio as they jumped 13.3 percent in the quarter. All of ERS' 10 domestic equity portfolio managers posted positive results, and seven matched or outperformed their respective benchmarks. International stocks rose 12.8 percent as all six of ERS' international equity portfolio managers beat their benchmarks. Total fixed income, which includes both domestic and international holdings, gained 2.5 percent.
In other areas, covered calls, an options strategy where an investor holds a long position in an asset and sells call options on that same asset, rose 5.1 percent; real estate, which is reported on a one-quarter lag, increased 4 percent; inflation-adjusted returns linked to oil and other commodities gained 2.3 percent; and private equity edged up 1.2 percent."
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I look forward to Bob Walsh weighing in to tell us that the world is wrong and he is right, that if we would just ignore reality and use the "Walshian Assumptions" everything would be fine.
Perhaps he'll get Andrew to run his famous simulation again using the "Walshian Assumptions" so that he can point to it and say "see, IF the fund merely earns these returns, we can surely afford these unsustainable, unaffordable, bankrupting entitlements for my entitlement-minded flock".
To which we of course would say "yes Bob, and IF a frog had wings, it wouldn't bump its ass, you ass."
To which Bob would then say "OK, your not buying that? How about door #2, where we monetize the Lottery and we use the proceeds to fund the unsustainable, unaffordable, bankrupting entitlements of my entitlement-minded flock?"
To which we say "Bob, let us introduce you to Gina. Unlike some of your minions, she's not going to be fooled into using your screwy Walshian Assumptions" ...and the rest is history.
Posted by: Leo at May 28, 2012 8:16 PMWhile the year to year projections are a bit aggressive, over the long term they have by and large been shown to be reasonable. It should be noted that pensions are earning 6% interest. Do 401k's? Pensions in of themselves are a great way to provide for retirement. The problem is companies saw money to be made with 401Ks so... there went Americans pensions. Greed at its worst.
Posted by: Rich at May 29, 2012 3:44 PMI guess RI and General Treasurer Gina Raimondo will have to take lessons from Hawaii how to wisely invest their retirement portfolio! I must also note, Hawaii unions sued in court to force State of Hawaii to contribute the required matching % funds into The State Employees’ Retirement System Pension Fund all the way up to the Supreme Court level and won!!!!
"Strong quarter lifts state pension fund by 8.3%
The ERS approaches its peak asset level as investors embrace risk once again
By Dave Segal
POSTED: 01:30 a.m. HST, May 16, 2012 Honolulu Star Advertiser
The state's largest public pension fund moved back into positive territory for the fiscal year as it soared 8.3 percent last quarter to boost its total assets to a near-record $11.5 billion.
(The following was a graphic chart in the newspaper article)
Tracking the Money
The State Employees’ Retirement System Pension Fund rose in third quarter 2012.
FY * 2012 3Q** Gain/loss +8.3% Total Assets (in Billions) $11.5
FY* 2012 2Q*** Gain/loss +5.5% Total Assets (in Billions) $10.7
FY* 2012 1Q****Gain/loss -11.2% Total Assets (in Billions) $10.2
FY* 2011……………Gain/loss +20.7%Total Assets (in Billions) $11.6
FY* 2010……………Gain/loss +11.7%Total Assets (in Billions) $9.8
FY* 2009……………Gain/loss -18.7%Total Assets (in Billions) $8.8
FY* 2008……………Gain/loss -3.4%Total Assets (in Billions) $10.8
FY* 2007……………Gain/loss +17.7%Total Assets (in Billions) $11.5
FY* 2006……………Gain/loss +11.1%Total Assets (in Billions) $9.9
FY* 2005……………Gain/loss +11.3%Total Assets (in Billions) $9.2
FY* 2004……………Gain/loss -15.8%Total Assets (in Billions) $8.6
FY* 2003……………Gain/loss +3.0%Total Assets (in Billions) $7.7
*Ends June 30 of each year; ** Ended March 31, 2012,
***Ended Dec, 31m 2011, ****Ended Sept. 30, 2011
Source: State of Hawaii Employee’s Retirement System Star-Advertiser
Hawaii's Employees' Retirement System's portfolio increased $814.4 million during the January-March period. Through the first nine months of the 2012 fiscal year, which ends June 30, the fund has earned a 1.4 percent return, according to a report issued Tuesday by Portland, Ore.-based Pension Consulting Alliance Inc., which advises the ERS board of trustees.
The ERS fund provides retirement, disability and survivor benefits to 111,648 active, retired and inactive state and county employees.
"This is one of the strongest quarters we've had recently, and the trustees were very pleased with this kind of performance and hope it continues," ERS Chief Investment Officer Rod June said.
"The (individual) managers' portfolios were structured in a way that they were able to outperform. This is a quarter where the managers who took risks were rewarded for that risk."
Equity markets turned in the strongest quarter since the initial rebound from the credit crisis in mid-2009, the report said.
"Investors once again embraced risky assets, as evidence of a sustainable economic expansion continued to mount," the report said. "Uncertainty regarding European banks and sovereign debt issues began to slowly subside due largely to the (European Central Bank's) efforts to ease funding and refinancing pressures."
The ERS performance beat the median 7.7 percent return of 26 public funds with assets of $1 billion or more. The ERS return also exceeded its policy benchmark —consisting of various index funds — of 7.5 percent.
It was the second straight positive quarter and the 10th gain in the past 12 quarters for the ERS fund. The peak level for assets was $11.7 billion on Sept. 30, 2007.
Still, Pension Consulting cautioned in its report that while economic data from the U.S. continue to improve, "rising oil prices and tax uncertainty could produce potential headwinds as politicians have yet to address pending tax hikes and spending cuts, both scheduled to take effect next year."
June also said he's concerned that problems in Europe, in particular Greece and Spain, could weigh heavily on the markets.
"I don't think that the trustees believe that the kind of quarter that we had in the first quarter is necessarily a trendsetter," June said. "We continue to manage the portfolio with caution and prudence."
Domestic stocks were the best performers in the ERS portfolio as they jumped 13.3 percent in the quarter. All of ERS' 10 domestic equity portfolio managers posted positive results, and seven matched or outperformed their respective benchmarks. International stocks rose 12.8 percent as all six of ERS' international equity portfolio managers beat their benchmarks. Total fixed income, which includes both domestic and international holdings, gained 2.5 percent.
In other areas, covered calls, an options strategy where an investor holds a long position in an asset and sells call options on that same asset, rose 5.1 percent; real estate, which is reported on a one-quarter lag, increased 4 percent; inflation-adjusted returns linked to oil and other commodities gained 2.3 percent; and private equity edged up 1.2 percent."
Posted by: KenW at May 30, 2012 2:39 AM