* 'It comes down to image' - Milwaukee official
* California teachers' fund urges 'non-resort' events
* Honolulu booked before the financial crisis
By Jim Christie
SAN FRANCISCO, March 7 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
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
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
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
"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.
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
"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
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?"