Brown vs. Curry on Jacksonville pension crisis: Where they stand

[mtraininjax]

Interesting fact, Brown wanted the City and JEA to go into more debt to pay for part of the pension crisis. Just like he wants to move a high balance of debt from one credit card to another. Nice balance transfer, yet, the debt is still there.....with no way.....to pay for it.

http://jacksonville.com/news/metro/2015-04-27/story/brown-vs-curry-jacksonville-pension-crisis-where-they-stand

"I'm with Alvin", "I'm all out of leadership"

[Tacachale]

Brown's pension plans are as bad as his budgets. He never should have tossed Peyton's plan, now we're 4 more years in the hole and no closer to a workable solution.

[mtraininjax]

Cause nothing is better for a city's safety and freedom from corruption than a bunch of cops who need money.

When they come for you in your time of need, you can tell the cops in the hospital how much you appreciate them. Cause moral is pretty low now and 4 more years is going to help?

Nope, I'm with Lenny. We need change, real change from 4 years with your boy Brown.

The whole 'crisis' has pretty much been bs from the beginning, and just part of a nationwide assault on public service unions.  It never had a sound mathematical basis, and the time elapsed since the identification of this phony 'crisis' has proven that.  Doing nothing, the obligation has still decreased anyways.

I think we see the real motivation to keep Brown. He is a preserver of the unions. Not once have we seen any real riffs in the unions with the Mayor, like we saw under Peyton and Delaney. Brown plays favorites with the unions. Keeps the peace with them. When in fact the unions represent a small number of people in the community. It will be interesting to see how many union members come out and vote on May 19.

[fieldafm]

The whole 'crisis' has pretty much been bs from the beginning

The pension crisis isn't made up. It's mathematically not sustainable.

Thank you, but no thank you to this clown getting his hands on our city administration.

Right on comrade, it would be such a shame to have someone lead our city that can actually balance a ledger. 

In fact the JEA has been underpaying the city for the past twenty years

So you realize then that in relation to revenues (which have been declining the last few years), JEA's contibution to COJ has actually been increasing (which is also not sustainable for JEA)? And that JEA's contribution agreement expires in 2016, at which time a new negotation b/w JEA and COJ will begin. So by packaging up pension reform with this funny business of going into debt in exchange for JEA concessions (IE their future contribution rate), that the Mayor's office is effectively absolving themselves of having to go toe to toe with JEA in a year from now. Not to mention that over the length of the agreement as proposed, COJ will get FAR less revenue from JEA. It's a political game that is being played, instead of exhibiting real leadership on the issue.

Then there is this issue of going into more debt in order to pay down existing debt. That's like falling down a hole and deciding that your best course of action would be to dig your way to China instead of using a rope to climb back up. You don't even need to be an accountant to figure out the fallacy in that line of thinking.

Your hero's glimmering suit of armor looks far less shiny when you take the helmet off.

[TheCat]

My understanding of Brown's pension deal is it will ultimately result in way less money to Jacksonville from JEA. We're trading an upfront cash dump for much lower payments.

Not good.

[Tacachale]

Brown's plan would be a sweet deal for JEA, but getting out of debt by taking on even more debt is crazy, especially  when it requires trusting an administration that can't even figure out how to buy a boat.

I'd say Brown's armor still looks nice and shiny, there's just nothing inside it.

[Tacachale]

It's an awesome deal for JEA, because they'd get to pay the city less of an annual contribution after giving over their lump sum. It sucks for the city, since we'd just be  covering our pension debt with new debt, plus we'd have less annual revenue from JEA for the future. If you don't see the problem with this, I don't know what to tell you.

[fieldafm]

You literally have no idea what you are talking about. I'll highlight the undisputed facts.

Fact: 
Less than half of future pension payments are funded. There is a deficit in the current pension of around $1.6 billion (about $1.3 billion in assets versus liabilities of around $2.9 billion). Even if the stock market soars (which frankly isn't going to happen), there is an unsustainable gap in funding.

That deficit will only get worse because there are less people paying into the system. Retirement plans work by current workers paying the benefits of retired workers (kind of like a Ponzi scheme). Fact: At the turn of the century, there were about 2.5 workers for every current retiree. Now that ratio is about 1.5 workers to every retiree. Meaning, there are less and less people feeding the beast. Coupled with the Fact: that current retirees are guaranteed a 3% cost of living adjustment to their benefit payout every year. Inflation is essentially zero right now (and hasn't been higher than 3% since 2007), which further increases the pension liability. That 3% COLA has stayed in place for every new hire entering the system. It needs to be eliminated (at the very least, for new hires) for the current pension funding shortfall to have any hope of just treading water.

Fact: COJ will throw about $150mm at the pension in FY2015 (give or take a few million). A little over 20% of the entire COJ budget is dedicated to pension benefits. The pension fund's liability is going to continue to grow (employees entering DROP have skyrocketed in recent years). It doesn't take a calculator to realize that $150mm/yr isn't even going to stop the leak, nonetheless fix the dam. Do you really believe that dedicating 40-45% of the City's budget should just go to paying retirement benefits of around 4,000 people in a few years from now? Because that's the path we are heading down now.

   

[Tacachale]

I think the final Peyton plan was pretty good, not perfect, but good. But what's done is done. We need a new plan, we're paying too much money into our debt at the expense of other things the city needs.

[fieldafm]

You do know that the Pension Gap has steadily gotten smaller, right?

That is utterly false.

At the turn of the century, the pension's assets could cover 87% of its liabilties. Today the pension's assets can only cover 43% of its liabilities.


Trying to dispute these facts is literally ridiculous.

[fieldafm]

yawn. sources and math please.

You literally have no idea what you are talking about. I'll highlight the undisputed facts.

Fact: 
Less than half of future pension payments are funded. There is a deficit in the current pension of around $1.6 billion (about $1.3 billion in assets versus liabilities of around $2.9 billion). Even if the stock market soars (which frankly isn't going to happen), there is an unsustainable gap in funding.

That deficit will only get worse because there are less people paying into the system. Retirement plans work by current workers paying the benefits of retired workers (kind of like a Ponzi scheme). Fact: At the turn of the century, there were about 2.5 workers for every current retiree. Now that ratio is about 1.5 workers to every retiree. Meaning, there are less and less people feeding the beast. Coupled with the Fact: that current retirees are guaranteed a 3% cost of living adjustment to their benefit payout every year. Inflation is essentially zero right now (and hasn't been higher than 3% since 2007), which further increases the pension liability. That 3% COLA has stayed in place for every new hire entering the system. It needs to be eliminated (at the very least, for new hires) for the current pension funding shortfall to have any hope of just treading water.

Fact: COJ will throw about $150mm at the pension in FY2015 (give or take a few million). A little over 20% of the entire COJ budget is dedicated to pension benefits. The pension fund's liability is going to continue to grow (employees entering DROP have skyrocketed in recent years). It doesn't take a calculator to realize that $150mm/yr isn't even going to stop the leak, nonetheless fix the dam. Do you really believe that dedicating 40-45% of the City's budget should just go to paying retirement benefits of around 4,000 people in a few years from now? Because that's the path we are heading down now.

   

btw. quoted for posterity

http://www.coj.net/departments/police-fire-pension-fund/annual-report/actuarial-valuation-as-of-oct-1,-2014.aspx

Page 4, line 3. Unfunded liability=$1.6billion. That's straight from the actuarial report put together by the plan adminstrator.

Math is hard, so I understand that the conepts of positive and negative numbers confuse people.

[JeffreyS]

 The people who borrowed the money were mayor Payton and Mayor Delaney. When they decided to take "" holidays" from paying the pensions because they thought they could effectively manage the money to a greater extent than the bills from the pensions would be . They in effect borrowed the money from the police officers and other city workers. Refinancing is not the same as adding debt.  This spin that brown should be measured by his job cleaning up the previous mayors mess is crazy. They created a hard problem solve. 

[fieldafm]

yawn. sources and math please.

You literally have no idea what you are talking about. I'll highlight the undisputed facts.

Fact: 
Less than half of future pension payments are funded. There is a deficit in the current pension of around $1.6 billion (about $1.3 billion in assets versus liabilities of around $2.9 billion). Even if the stock market soars (which frankly isn't going to happen), there is an unsustainable gap in funding.

That deficit will only get worse because there are less people paying into the system. Retirement plans work by current workers paying the benefits of retired workers (kind of like a Ponzi scheme). Fact: At the turn of the century, there were about 2.5 workers for every current retiree. Now that ratio is about 1.5 workers to every retiree. Meaning, there are less and less people feeding the beast. Coupled with the Fact: that current retirees are guaranteed a 3% cost of living adjustment to their benefit payout every year. Inflation is essentially zero right now (and hasn't been higher than 3% since 2007), which further increases the pension liability. That 3% COLA has stayed in place for every new hire entering the system. It needs to be eliminated (at the very least, for new hires) for the current pension funding shortfall to have any hope of just treading water.

Fact: COJ will throw about $150mm at the pension in FY2015 (give or take a few million). A little over 20% of the entire COJ budget is dedicated to pension benefits. The pension fund's liability is going to continue to grow (employees entering DROP have skyrocketed in recent years). It doesn't take a calculator to realize that $150mm/yr isn't even going to stop the leak, nonetheless fix the dam. Do you really believe that dedicating 40-45% of the City's budget should just go to paying retirement benefits of around 4,000 people in a few years from now? Because that's the path we are heading down now.

   

btw. quoted for posterity

http://www.coj.net/departments/police-fire-pension-fund/annual-report/actuarial-valuation-as-of-oct-1,-2014.aspx

Page 4, line 3. Unfunded liability=$1.6billion. That's straight from the actuarial report put together by the plan adminstrator.

Math is hard, so I understand that the conepts of positive and negative numbers confuse people.

Math can be so hard for some people.  Especially when they haven't actually bothered to check it.  I find that when they haven't actually checked the assumptions they usually have to rely on semantics to make it seem like they know what they are talking about.

Like pretending that the statement that the gap has narrowed wasn't referring to 'since it was originally labelled a crisis' and pretending instead that it referred to a figure long ago in the past before new negotiations changed the parameters of the obligations.  Very weak, mike.  Very weak.  You should probably mark down whoever is sending you stuff from the Curry campaign to repost here as a buffoon.

Interestingly, you seem to have missed literally the opening statement of the report you used as you Exhibit 1.



Now, while many people find Math hard, I find that some people find English even harder.

So you will forgive me if I wonder which part of "It should be understood that the costs and actuarial present values presented in the report depend upon forecasts of future events, and that they, therefor, depend upon elements of subjective judgement. Due regard should thus be given to the reasonableness of alternative values and conclusions" that you didn't understand the first time that you didn't read it?

Perhaps you can explain why your cited expert reference is not agreeing with your bold and definitive statements?

I highlighted the actual passage in red.  Perhaps that will help you actually see and read it.

Try reading it aloud.  I find that sometimes makes things easier to understand.

I'm not going to say anything derogatory at this point because your total ignorance of finance is clear. For your own benefit, please understand that you do not fully comprehend what you are arguing about at this point.

If I said those same things, I should be fired because I am a financial profesional that knows better.

[fieldafm]

A statement of actuarial opinion (besides being legally required) doesn't mean that every number in the preceding document was simply made up. Balance sheets are simply snapshots of a point in time. Tomorrow, the stock market may crash and the assets would therefore plummet.

[edjax]

A statement of actuarial opinion (besides being legally required) doesn't mean that every number in the preceding document was simply made up. Balance sheets are simply snapshots of a point in time. Tomorrow, the stock market may crash and the assets would therefore plummet.

You would think with all his knowledge he would put it to good use such as running for office, which he has indicated he would do in the past.