L.A. PENSION FUND SOARS 11% OFFICIALS WARNED ABOUT TOO MUCH OPTIMISM.Byline: Troy Anderson Staff Writer Investment income from a gaining stock market and a hot real estate market helped boost Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. County's pension fund to a record $32 billion last year, the highest level in five years, county officials said Wednesday. The 11 percent increase is welcome news for the Los Angeles County Employee Association fund, which had faced soaring unfunded liabilities amid promised increased retiree pensions and rising health care costs and workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. claims. Officials said the boost - which pushed the fund over its previous record of $31.6 billion in 2000 - will help offset about $700 million of the fund's $5.6 billion in unfunded liabilities last year. And the taxpayer contribution to the fund - which jumped from $522 million in 2003-04 to $750 million last fiscal year - is expected to increase more slowly, to about $779 million this fiscal year. ``I think it's great news,'' county Chief Administrative Officer A chief administrative officer (CAO) is responsible for administrative management of private, public or governmental corporations. The CAO is one of the highest ranking members of an organization, managing daily operations and usually reporting directly to the chief executive David Janssen said. ``We tend to forget that the markets are cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. challenges. They go down and they go back up. So the continued pressure on the county to fund the unfunded liability is greatly lessened by this. ``I think (the unfunded liability) will go pretty close to zero. That's what happened in the late 1980s and early 1990s. It went from a huge deficit to a surplus. It's moving in that direction again.'' George Passantino George Passantino (1922-2004) was an American artist, teacher, and author. He studied under Robert Ward Johnson, Howard Trafton, and Frank J. Reilly. He taught at the Famous Artists School in Westport, Connecticut, at the Art Students League, and at the Silvermine College of Art in , a senior fellow at the Reason Foundation in Los Angeles, acknowledged the fund gains, but noted that the county issued $2 billion in pension bonds in 1994 to pay the plan's unfunded liabilities, a debt the county will not pay off until 2010-11. And Passantino said Janssen's predictions are too optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op and that the county should focus on paying off existing pension debts, which total about $300 million a year. ``That's a roll of the dice that taxpayers should be a little concerned about,'' Passantino said. ``I'm sure there were a lot of attitudes similar to that in 1999 that, 'We're in good shape and it's smooth sailing ahead.' I'm not convinced that's the case. ``The ebb and flow the alternate ebb and flood of the tide; often used figuratively. See also: Ebb of the markets is one thing. Then you have decision- makers, particularly at the state level, that as soon as the projections get rosy, they start handing out more money. I wouldn't be surprised to see a benefit proposal on the table as these unfunded liabilities are perceived to be going down. And again, the taxpayers will get stuck holding the bag.'' The record LACERA LACERA Los Angeles County Employees Retirement Association assets - which mirror an 11.2 percent gain in the California Public Employees Retirement System fund that pushed it to a record $200.1 billion last year - comes amid growing concerns about how public agencies are going to pay for the enormous unfunded liabilities, the difference between the assets and liabilities. In California, taxpayers are on the hook Adj. 1. on the hook - caught in a difficult or dangerous situation; "there I was back on the hook" dangerous, unsafe - involving or causing danger or risk; liable to hurt or harm; "a dangerous criminal"; "a dangerous bridge"; "unemployment reached dangerous for an estimated $110 billion to $185 billion in unfunded pension and benefit liabilities. Nationwide, taxpayers are exposed to more than $350 billion in unfunded pension liabilities Pension liabilities Future liabilities resulting from pension commitments made by a corporation. Accounting for pension liabilities varies widely by country. . These debts have grown significantly since 2000 as public pensions have become increasingly generous, boosting retirees' monthly checks, making it easier for employees to retire earlier, and spending more on health benefits. National pension expert Stephen D'Arcy, a professor of finance at the University of Illinois University of Illinois may refer to:
``In the long run, we can't count on investment returns themselves bailing us out of the problem,'' D'Arcy said. ``We still have to have the discipline to fund the plans on a regular basis to meet the long-term needs. So if the public entities continue to put the funding in that is required, that coupled with some very good years in returns, will solve the problem. ``What I'd be concerned about is if public officials look at the great investment returns, and then cut back on annual funding thinking they don't need to put the additional funding in.'' Troy Anderson, (213) 974-8985 troy.anderson(at)dailynews.com |
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