Government plans - state and local - investments of |
California Teachers' Retirement Fund Commits $500 Million to Infrastructure
The California State Teachers' Retirement System is ... committing $500 million to roads, utilities and more. [T]he recent economic crisis demonstrated ... the need for greater diversification in [the fund's] investment portfolio, in areas that would also serve as a hedge against inflation[.] (The Sacramento Bee)
Facebook's Corporate Governance Rules a Concern for CalSTRS
"Facebook's corporate governance rules, which give shareholders little say in how the social networking website would be run as a public company, are raising the hackles of one of the largest U.S. investors, the California State Teachers' Retirement System." (Reuters via The New York Times; free registration required)
Lower Your Earnings Assumption, Milliman Tells Second-Largest Public Pension Plan
"'There is a less than 50 percent probability that the current assumption' of 7.75 percent will be met [by the California State Teachers' Retirement System] 'over the long term,' Milliman actuaries wrote in their report." (Bloomberg)
Public Pensions Pile on Risk to Beat Underfunding
"Public sector pension fund investors and their fund managers react differently to an underfunded status than their private sector peers, Nancy Mohan and Ting Zhang at the University of Drayton found in research . . . [G]overnment accounting standards 'strongly affect risk-taking behavior', as most pension plans used higher return assumptions to discount their pension liabilities." (aiCIO)
[Opinion] California Public Pension Funds Should Disclose When Investment Earnings Miss The Mark
"Investment earnings are expected to provide two-thirds or more of the money needed to pay pensions in future decades. Critics say earnings forecasts, 7.75 percent a year for CalPERS and CalSTRS, are too optimistic and conceal massive taxpayer debt." (Capitol Weekly)
AFSCME Plan Files 21 Shareholder Proposals
"The plan proposals are designed to protect and enhance the economic value of its long-term investments. They would require greater director accountability, independent corporate board leadership and greater transparency in the companies in which the plan invests." (PLANSPONSOR.COM)
Pension Fund Sues MetLife Claiming False Data Punished Stock
"MetLife Inc. . . . was sued by a Michigan police and firefighters pension fund for allegedly misleading investors about its finances, triggering declines in the stock price." (Bloomberg L.P.)
[Opinion] Who Knew? 80% Funding Target for Pension Funds Just An Urban Legend
"People refer to one report or another to substantiate their claim that some presumed experts actually made this assertion (including a GAO report and a Pew Center report that both cite unidentified experts), but nobody actually names these alleged 'sources.'" (WPRI.com)
Internal Bank Papers Show Worry over Florida Pursuit of Pension Fraud
"An informer in a state fraud case against Bank of New York Mellon Corp. offered prosecutors an inside look at how the bank allegedly scrambled to contain a government investigation into whether the bank overcharged Florida's state and local pension funds, among others, to execute currency trades." (Tampa Bay Times)
Quarterly Summary of the Finances of Selected State and Local Government Employee Retirement Systems (PDF)
"For the 100 largest public-employee retirement systems in the country, total holdings and investments were down in the third quarter of 2011 following four consecutive quarterly increases." (U.S. Census Bureau)
Tougher Wall Street Clawbacks Needed, NYC Comptroller Says
"New York City Comptroller John C. Liu, who oversees $108 billion in pension funds, said Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley should target senior executives' pay to prevent improper or risky practices." (Businessweek)
Will New York City's Pension Governance Prposal to Become the Model for 21st Century?
"New York City is proposing to completely restructure the management of its pension funds. Rather than 5 boards and 58 trustees, the proposal will bring together the 5 pension plans under one roof to be managed by professional investors and a non-partisan staff. If approved, New York City will take the politics out of its pension plans . . . ." (CNBC)
Logical Implications of GASB's Methodology for Valuing Pension Liabilities (PDF)
"It is well known that the funding status of state and local government defined benefit pension plans, as measured by the accounting methodology prescribed by the Governmental Accounting Standards Board (GASB), improves when the plans take on more investment risk. This paper documents several lesser known logical implications of the GASB methodology." (University of Rochester, Simon Graduate School of Business)
Bank of America, CalPERS Settle Suit Over Countrywide
"California's giant public pension fund and 15 other large investors settled lawsuits that accused former mortgage giant Countrywide Financial Corp. of costing them billions of dollars in stock losses by failing to disclose the severity of the risks posed by the easy-money loans the Calabasas lender handed out during the housing boom." (Los Angeles Times)
New York Governor Considers Using State Pension Funds to Help Finance New Tappan Zee Bridge
"Infrastructure investing makes 'perfect sense' for pension funds, which need steady returns to meet their obligations to retirees, said Joel Moser, a New York-based partner in the energy and project finance group at Bingham McCutchen LLP who is not involved in the plan." (Businessweek)
Looking to Pension Funds to Pay for Public Works Projects
"Pension plans are limited partners, pooling their monies with other institutional or private investors. If the investment makes money, the plans, in these cases, are entitled to a 'hurdle' rate of return. That's a percentage threshold that must be reached before profit flows to a general partner, the private-asset manager of the fund, on top of a fixed fee." (The Wall Street Journal)
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