-
Now into its work, at the third meeting (twice a month schedule), sub-committees created.
- We think they have extended their time in order to finish the job...in late December 2018...carries over a bit into 2019.
- NEW PUBLIC PENSIONS 101 or how we got here: http://www.ctn.state.ct.us/ctnplayer.asp?odID=15893
The opening meeting of this new Commission announced a summer reading list which can be found on this webpage: https://www.cga.ct.gov/fin/taskforce.asp?TF=20180710_Pension%20Sustainability%20Commission
MEMBERSHIP: https://www.cga.ct.gov/fin/tfs/20180710_Pension%20Sustainability%20Commission/membership.pdf
MEETING NOTES
Please note that written presentations by invited guests online
READING LIST AND OTHER DOCUMENTATION
NEWS REPORTS
APRIL 4, 2019
LAST MEETING MAYBE...CT-N: http://ct-n.com/ctnplayer.asp?odID=16189
L-R Chair., expert in municipal finances, Att'y Dept. of Administrative Services, Att'y
State Treasurer's Office, Attorney Teacher's Retirement...more lawyers, too.
CHAIRMAN VERY MUCH IN CHARGE.
- Final review of report.
- Intention to not have to meet again, but rather make only minor edits for style.
- Lots (no pun intended) of minor details. Lottery transfer for limited period
- Can't wait to see who is going to vote no...and how this is handled.
SECTIONS RECOMMENDATIONS/EDITS: Being put into word document as they are made.
- If you want to continue fund the work - Chair. points out the Legislature might award 25 cents.
- Correction: Tier 2 date 1982.
- More editorial detail.
- Jab at LOT (Legacy Obligation Trust)
- Second thoughts on some previous edits.
KEY FINDINGS AND/OR RECOMMENDATIONS: Agree. Approving as
amended today. Phone call meeting if necessary. "Better outcome
than the last Commission I was on" - which we reported on here. After 8 months Spending Cap group voted 11-12 not to approve recommendations.
FINAL DRAFT EXECUTIVE SUMMARY
Published online at the Commission's website as will final final one of the whole report..
NEXT STEPS: TO BE POSTED ON WEBSITE
JANUARY 18, 2019 AT 3PM - final report,
The Commission outline discussed. And votes taken on individual draft recommendations.
"LOT" concept getting whacked. No one seems to want to recommend a
new Commission. No one seems to want to continue, either.
They don't want a political solution.
COMMITTEE WORK RECOGNIZED...number of more meetings
Volunteers for doing chapter of final report. Date for next
meeting must have enough time in advance (2 weeks) and FINAL MEETING.
NEXT:
- Feb. 26th 10am next meeting, 3 hrs est. Location to be announced.
- Last meeting March 5th, 10am. At least that's what we think it is...
CTNEWSJUNKIE: https://www.ctnewsjunkie.com/archives/entry/20190111_pension_commission_still_wrestling_with_asset_question/
OVERTIME: JANUARY 10, 2019 MEETING OF PENSION SUSTAINABILITY COMMISSION
RECALLING ANOTHER COMMISSION
Devil's advocate re: voting before final report draft?
Extension requested for completion of report no ruled out...
The issue of what's in and what's out the subject:
- Property not used for government functions on government land.
- Value of the assets
- If you don't own it forget it.
- Not state and forest land. Or not? State is desperate
- Final report?
Questions.
Should there be a summary? History? Consequences of doing nada.
Benefits?
Helpful contributions from two lawyers and Mike - next meeting next Friday...1-18-19 similar time, location T.B.A.
What;s not been talked about?
HOW MANY MEMBERS GOING OFF THIS COMMISSION ?
December 12, 2018: Setting up "draft" recommendations - ending up with another "draft" discussion after the new year.
We believe we heard at the end the
Chair. thanking Treasurer Nappier for all her work through the years and
inviting her participation as the Commission reaches its last steps.
OPM CONTRIBUTION - NEED THE DETAILS SOONER? MATRIX NEEDED FOR HOT TO GET THERE.
Treasurer explains further and elaborates on various aspects of both
Lottery idea as well as "LOT" concept modifications. With
comments, including those of Comptroller's rep.
ALL ON THE TABLE - DO THEY KNOW THAT FEBRUARY 1, 2019 A.C.I.R. IS HOSTING F.S.E.G. FORMER CO-CHAIRS.?
Of course, the best comments came from Westonite (l). Teacher's
Union rep sort of out of his depth. Agnostic on real estate moves.
Very thoughtful comments by both.
T.R.S. Attorney made some really excellent suggestions regarding Legislative process.
TREASURER. RETURN ASSUMPTIONS.
Criteria discussion. Asset criteria. What can Treasurer
do? If you don't tell the Legislature they can't be without policy
discipline.
NOT SURE IF HE SAID THIS BUT...
The equivalent of "fish or cut bait." The C.G.A. seems to like to
"fish AND cut bait." No mention of the fact that CT owns R-O-W of the former
New Haven Railroad. AMTRAK apparently has rights to use it.
CHAIR. THANKS RETIRING STATE TREASURER
We believe there will be an extra meeting in January 2019 (T.B.A.) prior to the
regular one...with information distributed in time for Commission
members to read it.
THIS MEETING IS SETTING UP THE RANGE OF OPPORTUNITIES FOR FINAL RECOMMENDATIONS
Chairman leads discussion of factors in final report to come.
"Opportunities - obstacles - questions" to come. Setting it down in "writing" for next meeting.
Choquette of D.A.S - "elephant in the room" is assets - not done yet. Not an "RFP" - commercial real estate.
FUTURE PROSPECTS? TOLLS INCLUDED? HOW ABOUT LOTTERY?
The framework set, it is now up to the Commission to flesh it out.
Which might prove difficult as all above did not agree on all concepts
proposed.
CTNEWSJUNKIE REPORT: https://www.ctnewsjunkie.com/archives/entry/20181118_nappier_pitches_solution_to_teachers_retirement_fund/
Treasurer Nappier's presentation much appreciated by Chair. Rep. Steinberg, newly re-elected.
2004:
She told the Legislature they were straining the T.R.S. and there is no way to work your way out.
"Assumptions" and rate of return. 8.5% assumption since 2014 for T.R.S. or not.
1992: Teachers' Retirement Fund
denied benefit of high return because State took $$ earned in highest years to use for something
related but not the T.R.S. Restructured COLAs. Lost
investment opportunities.
The pitch to monetize the Lottery.
Segregate the lottery for
T.R.S. How many lawyers and actuaries can fit on the head of a
pin? Treasurer is wise and feels free to point out the obvious
now. July 2025. Proceeds???
Oy Vey - Non-cash transfers?
(L) Treasurer's Att'y points out the obvious - conflict of interest.
Treasurer also calms things down. Must honor our word. Plus
rating???
Questions.and observations and Chair. notes after Thanksgiving event discussion of recommendations will take place. T.B.A.
Chairman has a cold/soar throat but is on the top of his game, anyway.
TEACHERS RETIREMENT SYSTEM. SCENARIO ANALYSIS
"Everything else is noise" - investment returns. Prepayment is good because principle gets paid off faster. You have to have a mid-point assumption - cost model.
SUBCOMMITTEES MET. SUBCOMMITTEE ON STATE LAND DOES A BIG REPORT
- 6400 properties available. What is the universe? Not airports (easily).
- Miscellaneous biggest with opportunities. Lists are flawed as vacant land not having street address???.
- Half of total of everything is education.
- A billion $$ of estimated value in total.
- CT DSA says it is doing just fine.
- Unused? Surplus properties only.
Opportunity Zones in towns might profit in a few places.
NOVEMBER 16th next meeting (Treasurer to report) - not the pre-set date .
F.O.I. complaint re: Sub-Commmittees
Since nobody has met as a subcommittee yet, the staff will be sure to post meetings.
NEW LOTTERY "EXECUTIVE DIRECTOR" (left, below): In hot water already?
- Risky? Reliability of Lottery revenue? CT very reliable.
- CT #5 in lottery revenue in U,S,A..
- What percentage goes to players? 60% goes to players...we didn't catch the rest, but this is apparently awesome result.
SAL LUCIANO JUST APPOINTED (not shown)
STATE LANDS: Conservation Easements? Define the problem. Political point -
benefits of non-public control gets rid of patronage? Prioritize? Who can help us?
HOW A BILL BECOMES A LAW INDEED. G.A.S.B. 48, 61. EXPLAINED
-
Legacy Obligation Trust (LOT), Lottery, anything else - expand commentary?
- O.L.R. report needed on answer to the question.
- TRS report has
options.
- Treasurer's Office reports exactly how they decide which
properties to "excess" (how about Haddam Land Swap?)
"Provocateur" comment - Chairman cannot believe this was such an awesome meeting! Judge is satisfied.
10am to 12:30pm - next meeting on the 31st.
LOTTERY CAN' T BE THERE TODAY SO COMMISSIONERS DID ROUND TABLE IDEA SESSION
Taking advantage of the opportunity, Commission puts forth questions.
State loses control, asks the teachers' union? Next meeting
will be presentations by Treasurer's Office as well as the Lottery
re: Assets available for "Trust" concept.
Cede control of assets? "Our of the box" worth a try!
Lots of questions. Why they are seeking a consultant. Both lawyers - one for C.E.A. and another for Treasurer, we think.
Can't wait to find out why this "out of the box" thinking cannot translate into a silver bullet for CT!!!
Or can it, but no one wants to give up anything?
VERY INTERESTING MEETING
Chair. Steinberg states that research has reached the next phase. Subcommittees actively at work and testing out ideas.
WE"RE WATCHING THIS AFTER THE FACT - ALTHOUGH WE DID WATCH IT ON TV LIVE...MID-WAY INTO NEXT SPEAKER TO THE END.
Hey, almost no problem. Market our cities differently.
Differentiate CT cities. Business by business. Investment
metrics - CT is small but exports a lot.
FAIRNESS OF INCENTIVES - PARTNERING WITH MUNICIPALITIES
Next speaker talk about direct and indirect impact (my own thought
about how many jobs are created by industry (3-1), commercial (2-1) and
"government" (1-1) jobs. " Economic multipliers."
NEW IDEA FROM DETROIT EXPERIENCE - WHY WAIT UNTIL BANKRUPT? BECAUSE STATES CAN'T DECLARE BANKRUPTCY?
A lot is an empty place. But not this meaning of "LOT."
"Working Groups" report in October. Need to be strategic - no fire
sales like Chicago.
QUESTIONS AND FINAL COMMENTS - NEXT MEETING OCTOBER 4TH TO INCLUDE LOTTERY.
More than 3 hr. meeting.
SEPTEMBER 7, 2019
PENSION SUSTAINABILITY COMMISSION
SEPT. 7, 2018 MEETING
Infrastructure asset class. Public-private ownerships. Concession financing. Valuation. (LWVCT in 2011 had Annual Meeting speaker Nicole Gelinas on this subject. Video of her presentation on video.)
Governance, length, JMO apples and oranges between Chicago and Australia.
PRESENTER ON TRANSFER
Into the weeds. Rating agencies. Mike Imber presents...
CREATE A TRUST
Legacy Obligation Construct $15-30k fee. "White Paper"
Optimization of assets; current market evaluation: CONSULTANTS? Comptroller-Treasurer might be able to help...
CAN'T FORGET G.A.S.B. RATING
Don't sell off assets right away. How we account for
this...two categories - money makers/losers; undeveloped assets
and capturing value. Some reaction below.
Commission lawyer-members chime in.
STRUCTURE OF COMMISSION SUB-GROUPS DISCUSSED - FOUR SUB-COMMITTEES:
Actuarial
Legal
Capital Assets selection group
Economic Development
NEXT MEETING ON SEPT. 21st...
QUESTION: How broad can recommendations be? Reestablish
credibility. Most interesting discussion from legislators on the
Commission.
AUGUST 17, 2018 meeting - presentation from Fiscal Stability & Economic Growth Chairs., consultants.
- Structured asset transfers.
- Reduce spending recommendations.
- Revenue pro growth rebalancing.
- Unfunded liability a terrible problem because they have been growing faster than the economy.
- Chicken before the egg. Asset transfer? Feasibility of rebalancing.
O.P.E.B.
- Keep T.R.S. at State level - O.P.E.B. at local.
- Find a way to get teachers into medicare.
Jim Millstein: Illinois and CT not far behind Puerto Rico. (From his time surveying all 50 states working for Tim Geithner.) Washington D.C. now addressing modifications.
- Let's not kid ourselves. 6% return more realistic. $22 billion, 55% underfunded.
- "The magic of compounding" - more assets earning 6% the
better. Increase cash contribution. Or seek to reduce
benefit obligation.
- Modifying benefits won't get you much.
- Increase asset balance.
- He says "Mike Imber proposed survey of excess CT real estate (land)" was a good
idea. Inventory of built real estate now suggested, off the cuff. (FWIW I've thought of
that)
- Optimize: Undeveloped properties for real estate assets.
- Lottery assignment of their Teachers Retirement System.
- Can you make it more than a wash? Restructured amortization period. The Legislature has some power.
- Australia had this problem and gave bonus to states.
- Changes in U.S. Tax Law being considered. Every state is looking at this.
"Tsuris" or distress, to be avoided.
Privatization now a no-no (in CT it is a union issue). An intergovernmental transfer would avoid this.
IMPACT ON BUDGET? NEW JERSEY EXAMPLE. Changing
assumptions. Volatility. N.J. effective minimum.
Investment bank estimate. "Who the hell knows?"
Chair, quotes Mike Imber a lot
NEXT MEETING: Sept.5, 6 or 7 - beware Jewish Holidays - generally every two weeks (Wednesdays).
OPENING MEETING: http://www.ctn.state.ct.us/ctnplayer.asp?odID=15473
July 24, 2018 first meeting - Sec'y Barnes' power point.
What did one member ask? ANS: "YES, BUT..."
"Are the properties listed on your website (the State website) the actual list of State of Connecticut - owned properties?"
\\\
What are some mechanisms to adjust stuff? How about data available on assets?
ANS.
You could shift funds within the State Budget to make the books balance
(my words here). Data resources now posted - a page from PEW - we
suppose this reflects the timing of investment problem...
HOW DO YOU SUGGEST THIS WILL ALL END? WILL THE LOTTERY FINANCE PUBLIC SECTOR & TEACHER RETIREMENT?
Not joking, Sec'y Barnes describes the act of drowning in debt as we
will be witnessing when the "balloon" payment hits or pops.
2025 is a big year.
...Professor Saulnier explained what would happen when the U.S. no longer had enough gold to back the dollar.
(The currency would then "float"). He drew two lines crossing in
an "X." Turning to the large lecture hall he said: "I
don't want to be here when that happens (which it did, in @1971)"
We are going through the reading list from top to bottom...
- PEW: https://www.cga.ct.gov/fin/tfs/20180710_Pension%20Sustainability%20Commission/PEW%20Report.pdf
- "ECONOMICS 101": https://www.cga.ct.gov/fin/tfs/20180710_Pension%20Sustainability%20Commission/Brookings%20Institute%20-%20State%20Local%20Pension%20Deficit%20Funding%20Primer.pdf
NEWS REPORTS:
Norwalk HOUR, 9-11-18: https://www.thehour.com/news/article/Wilms-calls-for-structural-changes-to-state-13218719.php
CTNEWSJUNKIE "EXTRA EXTRA":
CT MIRROR: https://ctmirror.org/2018/07/24/panel-seeks-new-ways-slow-skyrocketing-state-pension-costs/