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sschullo

Castrs Poll!

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As a current educator, how confident are you that your pension will be there when it is time to retire?

 

I wonder how many respondents have actually completed or read or even know the results of an actuarial analysis of Calstrs current and future income, investments, and liabilities.

 

 

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Hi Chrys,

I would have voted "Very confident". I can't because I am retired. I am wondering if they will break up the data into age and gender. Are younger teachers more pessimistic than older ones?

Steve

 

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Private Equity portfolio as of 9-30-08.

Five top investments:

 

Texas Pacific Group: $3.1 billion

Blackstone: $2.9b billion

CVC Capital Partners: $1.9 billion

Welsh Carson: $1.8 billion

Permira: $1.7 billion

 

For an opinion on how the private equities are valued, their performance as of 9-30-08 and the entire portfolio, check this out:

http://zerohedge.blogspot.com/2009/04/calistrsnication.html

 

For a perspective, Private Equity is about 10% of the entire portfolio. Do you think this allocation to a very risky sector may have led to the recent 33% drop in the last 1.5 years?

Presenting this data to help us learn how a diversified portfolio works and to think about the risks we take in our personal investments.

CalSTRS Asset Category by holding: http://www.calstrs.com/Investments/portfolio/Index.aspx

 

The portfolio has almost 80% in equities and 20% in fixed income and cash. This portfolio is great in a bull market, but terrible in a bear market. In hindsight, obviously, the management team took on a lot of risk because the portfolio grew from a low of about 95 billion after the 2000-2002 bear market to reach a high of 171 billion on June 30, 2007. I wonder what the management team is thinking after these massive loses. The next report on their asset allocation will be available in July 2009.

 

Ponderings,

Steve

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Hi AP and all,

Did you notice that CalSTRS took the poll down? Just click on my links.

I look at the site almost daily and it was put up either thursday or last Friday and took it down yesterday.

Guess they don't like bad news.

 

The results reflect the malaise of the general economy rather than CalSTRS. Also, its been reported by the mainstream news for a long time that younger workers truly believe that SS and their pension will not be around when they retire in the decades ahead. The way things are going, I don't blame them for feeling this way.

 

But the question is why did CalSTRS take the poll down so quickly? I sent them a message them.

Steve

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Hi AP and all,

Did you notice that CalSTRS took the poll down? Just click on my links.

I look at the site almost daily and it was put up either thursday or last Friday and took it down yesterday.

Guess they don't like bad news.

 

The results reflect the malaise of the general economy rather than CalSTRS. Also, its been reported by the mainstream news for a long time that younger workers truly believe that SS and their pension will not be around when they retire in the decades ahead. The way things are going, I don't blame them for feeling this way.

 

But the question is why did CalSTRS take the poll down so quickly? I sent them a message them.

Steve

 

 

Now the poll is back up!

My head is spinning. Its to bad that nobody at calstrs explains much to us ordinary folks.

 

 

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Hi Anonymous Coward,

 

And in that article:

"That spells trouble for taxpayers in states that put public employee pension money into private equity deals. The U.S.' 20 largest public-pension plans, in states ranging from California to New York to Michigan, had $140 billion tied up in private equity as of this past July, according to the Private Equity Council. Some funds invested from that pot have certainly tumbled since then. The damage could be worst in Oregon, Washington and California, where pension managers, enraptured by market-beating returns from leveraged buyouts during the bull market, wrote enormous checks to buyout firms in the last few years. Taxpayers are on the hook because public employees are guaranteed a certain number of dollars at retirement."

 

Steve

 

 

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So... what part of that quote caught your attention? The part about taxpayers being on the hook? How familiar are you with the various sources of income for the state of California? In particular, what do you know about the distribution of the income tax burden here in California? Have you ever looked at FTB stats?

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So... what part of that quote caught your attention? The part about taxpayers being on the hook? How familiar are you with the various sources of income for the state of California? In particular, what do you know about the distribution of the income tax burden here in California? Have you ever looked at FTB stats?

 

 

This is the quote that captured my interest:

 

"The damage could be worst in Oregon, Washington and California, where pension managers, enraptured by market-beating returns from leveraged buyouts during the bull market, wrote enormous checks to buyout firms in the last few years."

 

I had looked at CalSTRS asset allocation and found that the calstrs management team made a similar mistake as ordinary investors, they were too aggressive, about 80% in equities, click here. This quote gave some evidence to my thinking.

 

Here is another article. What are the pension managers and trustees going to do now? According to this article, they cannot go into less risky sectors because the unfunded liability will look worse than the outlook for another round of risky investments. The incentive for managers and trustees is remain or add risky investments so the future higher expected returns outlook will decrease the unfunded liability.

The politics in all of this is simply amazing.

 

2 cents,

Steve

 

 

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