Negative news stories about pension systems in California have dented members' belief in secure retirement, with 68% of respondents to a California Teachers Retirement System (CalSTRS) poll declaring they were less confident about the likelihood of secure retirement.
In the poll, members of the US$158bn CalSTRS were asked how press reports had affected their confidence in a secure financial retirement. Some 33% of respondents said they were “much less confident”, while 35% claimed they were “somewhat less confident”.
In reaction to the responses, the CalSTRS board said: “The results demonstrate that there is an increasing worry on the part of our members. This underscores the need for our System to be continually proactive with its external communications.
Some daily newsclip services – such as the one operated by the Fullerton Association of Concerned Taxpayers (FACT) – have dedicated themselves to revealing that “the appro- aching wave of pension debt is bigger than it looks”.
The self-confessed purpose of the site is “to provide an overview of the multiple pension crises that are about to drown America’s taxpayers”, with a particular focus on the Californian funds.
Jack Dean, editor of PensionTsunami, the FACT- operated site, claimed:
“I sincerely doubt that there has been any direct impact on public opinion, but that has never been our focus.”
He said the site’s main goal was to “inform editors, reporters, public officials and taxpayer activists across the country (and around the world) that the pension/benefits problem is huge, is growing and is only going to get worse unless dealt with”.
Dean added: “To some extent, we want to make those who are most aware of the crisis in their own communities realise that they are not alone.”
The other pension fund heavyweight in the state, the $230bn California Public Employees Retirement System (CalPERS) also expressed concern over continuing bad press.
“The issue of our funding status or amount of unfunded liability has been distorted and overblown by our critics,” a CalPERS spokesperson said. The system is currently about 90% funded. According to the fund, experts consider this to be very healthy.
“But, with a $230bn pension fund, a 10% unfunded liability is equal to about $25bn, a large figure if taken out of context, but very manageable in the context of a $230bn fund,” the spokesperson noted.
Mercer Investment Consulting senior public sector actuary Steve McElhaney commented: “There have been a lot of articles about unfunded liabilities of public pensions and that would have an effect after a while.”
Mark Evans has been appointed as a director at Independent Trustee Services (ITS) to lead trustee appointments in London.
The Pension Protection Fund (PPF) is consulting on changes to the actuarial assumptions it uses in valuations in a bid to better reflect the bulk annuity market, with schemes set to move into surplus on aggregate.
Private sector defined benefit (DB) schemes were 96.3% funded on a Pension Protection Fund (PPF) compensation basis at the end of July, according to the lifeboat fund's monthly index.
Conduent has completed the sale of its actuarial and human resource consulting business to private equity investor, H.I.G. Capital.