Public pension fund conference in Hawaii draws boycotts

Thu Mar 7, 2013 3:00am EST

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By Jim Christie

SAN FRANCISCO, March 7 (Reuters) - Budget cuts and austerity may be on the agenda when public pension fund officials hold their annual conference in May, but delegates will be able to take some comfort from their surroundings on the palm-fringed beaches of Waikiki.

The National Conference on Public Employee Retirement Systems' leadership did make the decision to hold their 2013 annual conference at a luxury resort in Hawaii before the financial crisis struck, hammering public pension funds' investments and leaving them with a funding gap of at least $770 billion.

Now that decision has put them in a tough spot, and some NCPERS members say they can not be seen jetting off to Hawaii in such tough economic times as these.

"Hawaii is just not the right message to send at this time," William Raggio, interim general manager of the Los Angeles Fire and Police Pensions, wrote in an email to the fund's proposed delegates.

Public-sector conferences are under scrutiny after the U.S. General Services Administration spent more than $800,000 on a four-day Las Vegas bash in 2010 for 300 employees. At the same time, anxiety is high over public pension funds, which have unfunded liabilities that range from $766 billion, according to the Pew Center on the States, to as much as $2.2 trillion by Moody's estimate.

NCPERS, which pegs itself as the largest trade association for public sector funds, is holding its five-day conference in May about as far as it's possible to go from its home base in Washington, DC, without leaving the United States - at the Hilton Hawaiian Village Beach Resort.

A four-star resort along Waikiki's widest stretch of beach with a deluge of pools and water slides, the resort is surrounded by palm tree gardens that boast South African black-footed penguins, flamingos, sacred ibis, chameleons, macaws and parakeets.

In Wisconsin - a state which boasts its own beaches on the shores of Lake Michigan - the city of Milwaukee employees' retirement system has ruled out participating.

Deputy Director Beth Conradson Cleary said the $4.2 billion fund has issues with "exotic" Hawaii: "The conference is excellent. It comes down to image."

NCPERS said it booked Honolulu in 2006 as "the best, most affordable offer." Had NCPERS canceled, as its leadership considered, the group would have lost $500,000 on the booking, said NCPERS Executive Director Hank Kim.

"Then we would have still had to put on a conference and that would have added costs," Kim said, adding that NCPERS's annual conferences, which draw about 1,000 attendees, typically cost $600,000 to $700,000 to put on.

"Objecting to Honolulu because it has beautiful beaches is like objecting to New York because it has Broadway and Times Square or objecting to New Orleans because it has jazz clubs and great food," NCPERS said in a statement.

In California, where the debate on the public pensions shortfall is a flashpoint, the California Watch website was the first to report on the movement to boycott the conference.

The $161 billion California State Teachers' Retirement System approved sending a board member but she declined to attend and the fund has urged "non-resort" locations for NCPERS conventions, spokesman Michael Sicilia said.

Steve Glazer, a Democrat running for a seat in California's legislature, said "tone deaf is too nice" to describe the choice of Honolulu for the conference for pension fund trustees, administrators and staff whose expenses are footed by their funds.

"It reflects a lack of awareness...It says you're out of touch," said Glazer, Jerry Brown's top political adviser during his successful 2010 campaign for California governor.

'VERY, VERY DELUXE'

The May 19-23 conference's preliminary agenda, which includes a welcome reception and workshops on investment strategies, disaster planning and corporate governance, allows for two hours per day of networking activities.

Registration fees of $650 to $750 for NCPERS members and $850 to $950 for vendors include breakfast, lunch, refreshment breaks and receptions. The program mentions an unspecified show on Wednesday night, while those who choose to stay through Friday can enjoy the hotel's weekly fireworks.

Hawaii may not be as pricey as critics assume, said Douglas Ducate, head of the Center for Exhibition Industry Research, a trade group for the conference industry.

Airfares within the U.S. mainland may be cheaper than flights to Hawaii and the time spent traveling shorter, but lodging costs may be lower in Honolulu than in some other U.S. top-25 destinations.

NCPERS said the Hilton Hawaiian Village Beach Resort in Honolulu cost 44 percent less that the accommodation paid for in New York last year.

In 2011, NCPERS held its annual conference in Miami. The 2010 conference was in Las Vegas and in 2009 the event was in Beverly Hills, California.

A round-trip flight on US Airways from Columbus, Ohio, where the state's school employees' pension fund is located, to Honolulu costs $750.28. Round-trip airfare on Delta Air Lines from Columbus to New York on the same dates would be $380.70, based on an online search run this week.

Lynn Wachtmann, a Republican Ohio House member, pans the School Employees Retirement System of Ohio for approving about $11,200 for three of its board members to attend the conference.

"For most Ohioans, a trip to Hawaii is considered a very, very, very deluxe trip," Wachtmann said.

Fund spokesman Tim Barbour said the $11,200 will cover conference registration, airfare, local transportation, lodging and meals, while the conference will help the Ohio fund's trustees make decisions later this year on asset allocation as well as reviewing actuarial firms seeking the fund's business.

Los Angeles County Employees Retirement Association Chief Executive Gregg Rademacher has no doubts about the value of sending two of his $41 billion fund's trustees to the conference.

"We think it is critical that trustees stay abreast of current trends and best practices in portfolio management," Rademacher said, adding that the conference meets his fund's policy that such events have at least five hours of substantive education daily.

The Fort Lauderdale General Employees' Retirement System will also send two trustees. "The location makes no difference, and it's a heck of a program," said David Desmond, the $511 million fund's administrator.

NCPERS's conferences are slated for San Antonio next year, New Orleans in 2015 and San Diego in 2016, Kim said.

Joe Nation, who researches pension fund finances at Stanford University, suggested more frugal locations. "Why are there never conferences or retreats in Newark?" said Nation, in reference to the gritty New Jersey city. "Do you have to be in Waikiki to learn about public pensions?"

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Comments (1)
Zafado wrote:
Painting perfume on a pig? The Pew institute for Public studies has the under funding of the various public employee pension funds of the 50 states at near $3 billion. The size of the awards to the top 20% getting the largest pensions continues to grow and the pensioners awarded annuities +10 years ago continue to beat the actuarial projections. Those in the top 20% in pension sizes tend to still take more than 50% of the annual pension fund’s gross annual distributions. These funds typically use projections for AARR Actuarial Anticipated rates of return of 6.5% to 8%. For the last 4 years these funds have paid out to the highest annuitants that portion of their defined benefit presumed to have earned that rate on their contributions. But since most funds are still losing money from the 2007 time period they typically have been paying the unearned portions of pensions for the high enders out of the contributions from the lowest compensated public employees. You can bet there will be no s=discussion of the need to lobby the individual state’s Congressional Delegations to put forward ERISA Reform to allow for progressive cuts to pension distributions already awarded but now unfunded to end the pyramid scheme against the current vested un retired, new participants & taxpayers who must fund the ever increasing contributions by the employers. the efforts to raise pensions and contributions continues to fail being fiscally prudent. Some states have eliminated COLAs thereby eliminating COLA creeps that are by nature quite regressive. A $60K pensioner that gets a 3% COLA gets an 1800 annual raise. The $30 K pensioner gets $900. Those who had the highest salaries in employment years then also having larger 403-b accounts as well as IRA balances. The less well compensated not keeping up with the cost of living in retirement is made the glaring example for continuing and increasing pensions at the current rates but in reality that leads to the top 20% getting the lions share of any enhanced benefit by way of COLA creeps. That is how so many got into the top 20% by way of longevity and pyramiding COLAs. My county in the 2nd of three +7% and 12% increases annually for salaried and others respectively to employee pensions just passed a county budget level funding employee compensation. That means that the increased contributions for pension and retirement will still have to be made for the employees who are kept on. At least 10 full time employees are expected to go to part time or lose their jobs to layoffs to fund the freeze of what went on as 5-7% increases in total compensation costs over the last 4 years. They are threatening a class action suit to destroy the no taxation with out representation concept in local gov’t that can not print money to fund these pyramid schemes that are getting out of control as against what the levels of total compensation are in the private sector where defined pensions have stopped offering incentives to the over 50s to retire. Instead they are ditching high threes for high tens generally not canceling COLA which was never offered with out a substantial actuarial reduction in a defined pension award. They are also increasing contributions by +10% to preserve the defined benefit but then that is a one way where the private sector employer does not see larger contributions but is level funded, while the employees see their take home shrink to save the pension from insolvency.

三月 07, 2013 7:17am EST  --  Report as abuse
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