Posted on 01/13/2017 10:21:24 AM PST by Lorianne
Hawaii lawmakers are set to open the 2017 session on Jan. 18 with millions of dollars in projects and services on their respective wish lists. But the budget is getting whacked before they even begin.
They learned last week that the state is expecting to collect roughly $155 million less in tax revenues than expected.
And this week they found out that the state pension system, which covers more than 120,000 public employees and retirees, is not coming close to meeting its financial goals.
It would require hundreds of millions of dollars extra each year to get the Employees’ Retirement System back on track, largely due to weak investment earnings and people living longer in Hawaii.
The ERS Board of Trustees had expected 7.65 percent returns from its market investments in 2016. Instead, the investments lost 1.2 percent, the worst showing since 2009. The system averaged 5.7 percent over the past 15 years, according to a report released Monday by the state’s independent actuarial consultant, Gabriel Roeder Smith & Company.
The market value of the system’s assets is $14.1 billion. It’s deferring $929 million in losses from 2016, whereas the previous year it had $42 million in gains.
Meanwhile, life expectancy is steadily increasing, which means more years — and more money — for government employers to pay the retirement benefits promised to public workers.
Hawaii residents are living 81.3 years on average; they are among the nation’s longest-living.
All this means it’s expected to take the state twice as long to eliminate its unfunded liability, which stretched to $12.4 billion in 2016 from $8.8 billion the prior year.
The actuary determined it would take 66 years instead to make the system solvent. The funded ratio dropped to 54.7 percent, calculated by dividing the value of the assets by the liabilities.
Gabriel Roeder Smith & Company, the state’s independent actuarial consultant, projects the unfunded actuarial accrued liability to top $12 billion based on new assumptions, including longer life expectancy and lower investment returns.
In a letter Monday to the ERS Board of Trustees, the actuarial consultants said, “66 years is an inappropriate amount of time to allow for amortizing” the current unfunded actuarial accrued liability.
SNIP
Trouble in Paradise.
Everything Democrats run turns to sh#t.
These people are victims of government well-fare. . .even though they voted for it. Hopefully a member of Trump’s leadership team can spend some time there with some of the state’s sane conservatives to help turn things around.
Maybe Obama can stay their permanently and they can offer immediate worship to his lies on a daily basis.
For a small by population state like Hawaii that’s a lot.
LOL he’s certainly found some sort of fountain of youth.
do you feel better now?
“They lost 1.2% last year. That’s investment malpractice. Whoever is managing this pension fund is either incompetent, crooked, or both.”
There was an article in the WSJ a few months ago about the guy who runs the State of Wyoming civil service pension fund. He invests it in a portfolio of index funds, and for decades has beat every actively managed state pension fund. He runs a one-man shop, and most days he either meets with state legislators or travels around the state, giving PowerPoint shows explaining how and why he manages the fund the way he does.
Democrats strike again
Awesome. Not surprising that WY is focused on pension performance, not politics.
The “public” workers in Hawaii are even more lazy and useless than most other states.
Here in the Atlanta the recently announced
retirement of the city police chief has raised eyebrows.
This clown is going to be receiving some $250,000.00 per year.
That’s $685 per day.
Out-f’ing-rageous.
I loathe these bastards more and more each day.
Yes I do Slick. I appreciate your concern.
I believe it is just that they are very shallow thinkers, all about “feelings”. They keep voting in more benefits because it “feels” good and gets them re-elected, and do not have the mental capacity to consider how it will be paid.
How can this be? Hawaii has the highest taxes and the most generous welfare in the nation.
Exactly, set up an account for each of the 120,000, and put in an amount based on their contributions minus a percentage of the shortfall, and “See ya around!”.
“But on the bright side you don’t have to move anywhere when you retire.”
yeah, but you very well may want to move to a state with much lower cost of living.
How the heck are they investing their money?
We’re out of money and it’s all the fault of white people!
Islands.
It’s islands!
Puerto Rico is in debt up to their coconuts, too!
Somebody warn Rhode Island!
It’s something to do with their propensity to capsize if you put too many people on one side I think.
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