- Posted January 26, 2013 by
This iReport is part of an assignment:
- Documentation showing a Retroactive Change of Values to the SBCERS Pension Between 1995-96 / 1996-97 Reports
- 20YRS. 1988-2007, 20YRS 1989-2008 & 1988-2011 24 YEARS OF SANTA BARBARA COUNTY'S ECONOMIC ASSUMPTIONS v. ACTUAL (SBCERS) PENSION FUND PERFORMANCE 1988-2007.
- What are the Compensating Factors that Make it Impossible for the Santa Barbara County Employees Retirement Systems Pension (S.B.C.E.R.S.) to be Anything but Fully Funded? Posted on January 13, 2013by magicinsantabarbara
- 45 minutes of Interview: Larry Mendoza with Bill Windsor of Lawless America Talking about the Santa Barbara Police and How I Was Harassed by Them
- My Greatest Day Being an American includes the FDNY after 9/11
SBCERS Pension Actual Performance Out Earns Santa Barbara County's Assumptions in Every Example?
Take a look at the Pension Growth in the graph, see how it represents the 8.16% desired growth rate from 1999 on. Nice and smooth just a gradual rise, the reason I like this graph so much is because it is simple. It is just a smooth growth that does not care about assumptions or Inflation factors, in all actuality that 8.16% is the all inclusive number. If that math and growth can work here it should work in the examples I have made for you today. Why are the pension audits an the explanations that people give about them always trying to lose us with additional numbers and factors?
Now I included three graphs that I made this weekend. In all three examples the Red line is the desired or assumption rate growth the County desired, nice and smooth. But you have to remember if this benchmark is met the pension should then be properly funded depending on the beginning funding level.
The Pink line represents the actual net return on assets earned by the pension which was greater than the desired rate (Red) in all three graphs.
The third Blue line takes into account that the County has represented additional contributions were required because of a constant unfunded future pension obligations (UAAL). By averaging the yearly additional contributions made because of the pension deficit then dividing that number by 12. You get a monthly deposit amount in addition to the multiplied rate 10.10% multiplied by the number of years (20) in a given period. Now in order to show how the monthly deposits affect the funds growth above the actual return rate I added the two factors together. So for example the chart below looks like this starting value of $270,540,000 but adding a monthly for 20 years (H) deposit of 580,000 X 10.10% this would be equal to an ending value of $2.37 billion dollars. Or another way to show this would be 270,540,000 X 11.16% (10.10 plus the effect of the additional contributions)(E) X 20 years is equal the same $2.37 billion dollars.
Regardless of how complicated and confusing my explanation is the bottom line is this. In each graph below the pension funds value ( Pink or Blue) is always greater than the assumption (Red) rate by as much as a billion dollars. You cannot earn more than you wanted, contribute more than you had too, and have your Inflation factor below what you anticipated and have any type of deficit, it is mathematically impossible. So I hope you can understand why I have been working so hard on challenging what the real status of the SBCERS pension fund should be.
20 YEARS OF SANTA BARBARA COUNTY'S ECONOMIC ASSUMPTIONS v. ACTUAL (SBCERS) PENSION FUND PERFORMANCE 1988-2007
America how are our pensions earning more than they wanted 8.16%)v. 10.10% , are contributing more than the normal rate of the County's yearly payroll and claim to have a Billion dollar unfunded deficit? I have just done the math that shows a Billion dollar surplus would have been earned:
1-Using assumption factor; $270,540,000 X 8.15% (A) X 20 years = $ 1.34 billion dollars.
2- Using Actual Performance Factor; $270,540,000 X 10.10% (E.) X 20 years = $1.94 billion dollars,
3-Same as example 2 plus a monthly deposit; Again a starting value of $270,540,000 but adding a monthly (H) deposit of 580,000 X 10.10% which is to earning 11.16% (E) X 20 years = $2.37 billion dollars.
look at the graphs. WAKE UP AMERICA!
20 YEARS OF SANTA BARBARA COUNTY'S ECONOMIC ASSUMPTIONS v. ACTUAL (SBCERS) PENSION FUND PERFORMANCE 1989-2008
1-Using assumption factor; $293,038,000 X 8.10% (A) X 20 years = $ 1.44 billion dollars.
2- Using Actual Performance Factor; $293,038,000 X 9.60% (E.) X 20 years = $1.91 billion dollars,
3-Same as example 2 plus a monthly deposit; Again a starting value of $270,540,000 but adding a monthly (H) deposit of 666,000 X 9.60% which is equal to earning 10.75%(E) X 20 years = $2.38 billion dollars.
See the graphs included with this rant!
SBCERS 24 YEARS of ECONOMIC ASSUMPTIONS
v. ACTUAL PENSION FUND PERFORMANCE 1988-2011
1-Using Assumption Factor; $270,540,000 X 8.10% (A) X 24 years = $ 1.82 Billion dollars.
2- Using Actual Performance Factor; $270,540,000 X 8.50% (E.) X 24 years = $1.99 Billion dollars,
3-Same as example 2 plus a monthly deposit; Again a starting value of $270,540,000 but adding a monthly (F) deposit of 1,008,000 X 8.50% which is equal to earning 9.79% (E) X 24 years = $2.68 Billion dollars.
See the graphs included with this rant!
S.B.C.C.C. The place where COMMON SENSE never goes out of style!