Public Pension Managers Shine Some Sunlight on Crisis with Hawaiian Vacation
Just say "aloha" to those terrible return numbers
When all is said and done, a crop of public pension fund managers spending a couple thousand to go to a conference in Hawaii is nothing compared to the hundreds of billions of unfunded liabilities facing several states. Still, it raises the hackles. Via California Watch:
When the head of one of the state's largest independent pension funds received an invitation recently for his staff to attend a conference in Hawaii, his response lacked the aloha spirit.
"I don't plan on approving anyone to attend this conference given its location. … 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, warned in an email to his staff.
But other pension plans couldn't resist. Four of the state's 24 largest independent municipal retirement systems intend to send up to five board members each, a survey by California Watch has found.
They include the city of Los Angeles, as well as Contra Costa, Los Angeles and San Diego counties – which are short a combined $17.5 billion to pay promised retiree pension benefits, according to figures provided by the plans.
The event is the National Conference of Public Employee Retirement Systems. According to California Watch, about 1,000 people involved in various public employee pension systems are expected to attend. They note that the conference seems to know the setting is sending a bad message:
The conference website supplies board members hoping to shore up support for their expenses-paid trip a "2013 Attendance Justification Tool Kit." The site also includes "7 Tips for Building Your Case for Attending the Annual Conference," which suggests that trustees emphasize how the conference could help them "build a networking list" and identify ways to help "save your fund money."
Asked why pension officials needed a tool kit to rationalize their trip to Honolulu, Hank Kim, executive director and counsel for the trade association organizing the national conference, said, "In hindsight, maybe 'justification' wasn't the best choice of words."
Conference participants defended the trip the way everybody always defends these kinds of all-expenses-paid vacations—networking and learning from each other. Maybe they'll have a seminar on not using politics to guide pension investment decisions. Probably not, though.
Let's hope they don't turn to the Hawaiian government for fiscal advice. As Reason TV's Sharif Matar and Zach Weissmueller discovered recently, that place is a mess.