I attended the March Investment Advisory Committee Meeting. Both Jon Braeutigam and Greg Parker provided an update to the Board. Both gentlemen emphasized that the fund is doing well even with a payout (for pensions) of about 3 percent of the fund. It was highlighted that the Federal Reserve Board voted to raise its interest rate for a second time in the past two years.
The majority of the meeting was given to the presenter, Greg Valliere, chief global strategist of Horizon Investments who is considered “ a guru on the nexus of politics and economics.” His focus today was on investment concerns and opportunities under the Trump administration. You can go to this web site www.horizoninvestments.com to read his Special Edition: How This Election Affects Global Markets for some of his insights. He had some very interesting and compelling insights.
NOTE: Private equity firms had a record $2.49 trillion in assets as of Dec. 31, and 319 new firms launched in 2016, according to a new report by Boston Consulting Group, “Capitalizing on the New Golden Age in Private Equity”.
“How Has the Shift to 401(k) Plans Affected Retirement Income?”
The Center for Retirement Research at Boston College issued a briefing that addresses how the transition from defined benefit to defined contribution plans affected retirement wealth and income during 1992-2010.
The brief’s key findings are:
The bottom line is that employer plans are providing less retirement income today than in the past. See the entire report at http://crr.bc.edu
Snyder Creates Task Force on Retiree Obligations
"Gov. Rick Snyder has charged a task force of accountants, elected officials and labor leaders with finding ways to help local governments meet their obligations to retirees. And they are large obligations: a ranking state official says retiree health care and pension liabilities for local government across Michigan total roughly $14 billion. Of that, liabilities of $11 billion are unfunded.” Read more at www.detroitnews.com
About one in three adults has $0 saved for retirement, according to a report from GOBankingRates”. 2017 Retirement Savings survey. Another 21 percent of Americans have less than $10,000 saved. That means more than half of Americans don”. t have enough set aside to cover expenses for even one year in retirement. Read more at www.gobankingrates.com
Shoring Up Pensions
Gov. Snyder and Mayor Duggan of Detroit are proposing to create a Retiree Protection Fund, or RPF, as a “proactive step designed to avoid the kind of pension tragedy when Detroit pensioners lost part of their pensions during the city’s historic Chapter 9 bankruptcy.”
“Creation of the RPF follows Detroit’s improved financial position,” Moody’s Credit Outlook wrote recently, calling the city’s move “credit positive” . Detroit reports being on track to record its second general fund operating surplus of at least $40 million in 2017. Read more at www.detroitnews.com
Can”. t Seem to Get it Right
First there were massive errors in the Unemployment Insurance program. Now it”. s incorrect salary information and audit errors.
According to an articles in the LSJ, Salaries for about 4,500 state workers were incorrect in the salary database posted online due to a “technical error” which caused the state to give out “erroneous information”. Read more at www.lansingstatejournal.com
Then again, the LSJ reports that the state owes about $145 million more toward retiree health care than previously reported based on audit findings. Auditors said officials, “did not have a process in place to assure completeness of their records".
What is with our IT department?
Comprehensive Annual Financial Report (CAFR) for 2016 is available on line
You can find the CAFR on line at the Office of Retirement Services (ORS) website.
Good News on Pension Fund
The Rockefeller Institute of Government released its latest report examining investment return volatility and its impact on the Michigan State Employees”. Retirement System (MISERS).
The report found that:
To read the report, go to www.rockinst.org.
Just a Little Humor :)
I love being over 60 … I learn something new every day … and forget 5 others
Editor’s note: June Morse may be contacted at email@example.com or 517-886-9323.
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