Quoted from ditcher

Okay,  meant no offense to anyone personally,.
The CAFR guy has some good ideas, me thinks, the main idea is that if accounts can be managed to meet their goals and not go in the red as retirement accounts, then why could
government not set up accounts the same way?
  Alot of the posts from CAFR so there is more who see it.
The main idea which seems good to me about this site is that is is better to talk to each other.
and Anarchy is always tossed in with a negative tone, as anarchy and chaos,
Anarchy is not chaos ,government is  organized chaos. Anarchy is not some evil thing it is people doing whatever they want except for doing harm. do no harm ,simple enough.
The comment  from Walter was not made by me only relayed.
so just to be clear,
My name is Kevin Mccauley I reside at earl street

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Derivatives are quickly becoming the instruments of choice for pension funds that want to strategically manipulate their risks. But you must choose your weapon carefully.

Derivatives, once labeled a mere adjunct to stocks and bonds, are fast becoming standard operating procedure for many U.S. pension funds. Derivative use is growing rapidly because these instruments have powerful and broad consequences for portfolio management. They actually permit the plan sponsor to manipulate the shape of the expected return distribution.

Plan sponsors have long invested in a broad range of asset classes to create returns that best offset the range of liabilities they face. In general, earning better returns required either changing the asset-distribution mix or hiring and firing managers. With either method, the return distribution was generally symmetric, at least with traditional securities classes. But with some help from derivatives, managers and sponsors can remove, truncate, emphasize or control risks both tactically and strategically.

For newcomers to the field, a derivatives instrument is a bilateral contract or payments-exchange agreement whose value is measured by the value of one or more underlying instruments, reference points or markets. The term covers a broad range of instruments ranging from options, futures and forwards to customized swaps and combination instruments, such as collars and structured notes. Many investment managers use derivatives to hedge on option overriding programs or to time the buying and selling of securities to keep fully invested. In addition, some managers and sponsors trade bond and index futures to change or rebalance portfolio weightings before buying the underlying securities. However, as plan sponsors increasingly use derivatives directly, the real growth will be in the over-the-counter derivatives markets.

That's because derivatives possess several important attractions for pension-fund sponsors. Once you overcome the initial policy and procedural hurdles, they provide faster and cheaper ways to implement strategies. For example, you can buy a structured note to get into a foreign or international market without hiring a consultant, a global custodian or an expensive investment manager.

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Public pensions and your right to know
TAGS: David Freddose
Comments (1) Share Print By: David Freddoso 12/04/10 9:05 PM
Online Opinion Editor
. America's housing and derivatives crises may be behind us, but another ticking time bomb looms just ahead in the many severely underfunded state and local government employee pensions.
Cities and counties alone face an estimated $574 billion in unfunded public pension liabilities, a recent Northwestern University study found. Philadelphia ($9.7 billion in unfunded liabilities), Boston ($7.5 billion) and Chicago ($44.8 billion) are all projected to run out of pension money by the end of this decade. Their problems only compound the multitrillion-dollar problem of unfunded state pensions.

Estimates of the problem's true size vary, because the governments with the biggest shortfalls often try to conceal their dire circumstances. In jurisdictions across America, pension funds attribute unrealistic values to investments and assume unrealistic rates of return. They protect themselves with exemptions from freedom of information laws, or even withhold information despite those laws.

In Illinois, the Chicago Tribune reported last month, public pension funds are specifically exempted from disclosing basic information, such as the values of their investments. In Pittsburgh, the Tribune-Review reports that the city's struggling pension fund has been withholding details even from city councilmen. As of last month, Pittsburgh's pension fund hadn't updated the data on its Web site in four years. Its directors fear that the state will take it and open its books to the public.

"The challenge," says Rep. Devin Nunes, R-Calif., "is that we know it's a problem. But we don't know how big the problem is."

Whether you are a taxpayer or one of the millions of Americans counting on public pension funds for your retirement, it is in your interest to know how badly each public pension system is underfunded. Indeed, you have a right to know, because your money is at stake. This growing problem could lead to massive benefit cuts or even more massive tax increases in your city or state. The problem will never be solved unless everyone understands it.

So how do you force states and municipalities to be open and honest about their pension liabilities? Nunes thinks he has the answer, and Reps. Paul Ryan, R-Wis., and Darrell Issa, R-Calif., agree. Last week, the three introduced the Public Employee Pension Transparency Act, which would use what leverage the federal government already has to force a truthful disclosure of public pension liabilities.

Every year, America's smaller governments issue bonds that have an advantage over other forms of debt. Provided that the issuers meet all of the criteria under federal law, interest from these bonds is exempted from federal taxes. This augments the after-tax yield of state and municipal bonds, making them compare more favorably with other conservative investments, such as corporate bonds. This indirect subsidy from Uncle Sam to local governments comes to about $40 billion annually.

Nunes' bill, in addition to barring future pension bailouts by federal taxpayers, simply adds a requirement for state and local governments that want to issue tax-exempt bonds. Unless they hand over complete information on the health of their pension funds to the U.S. Treasury Department, they won't qualify for the treasured tax exemption. You want to borrow money and build that new school or town square? Then show us your books.

The bill directs the Treasury Department to post the information online. Citizens will be able to make an apples-to-apples comparison of the health of the nation's many pension funds, using realistic and uniform rates of return.

Nunes' bill isn't a solution to the coming pension crisis, but it is a very good first step. "At least it gives us something to fight for," he says. He acknowledges that the bill won't pass the House until next year -- he's just proposed it now in order to give it some early attention and drum up support. And even in the new, more Republican Congress, it is unlikely to overcome the Senate's 60-vote hurdle. What's more, President Obama could veto it, especially if public-sector unions feel threatened by the proposal's ban on bailouts.

But when a problem reaches the trillion-dollar level, political pressure has a way of solving it. Government transparency is not, or at least should not be, a partisan issue. And after this recent election, American voters don't seem eager for yet another bailout.

David Freddoso is The Examiner's online opinion editor. He can be reached at dfreddoso@washingtonexaminer.com.



Read more at the Washington Examiner: http://washingtonexaminer.com/.....t-know#ixzz1GWjjRVoQ

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Schalmont budget with no tax hike gets OK
BY MICHAEL GOOT Gazette Reporter
Reach Gazette reporter Michael Goot at 395-3105 or mgoot@dailygazette.net.

    The Schalmont Board of Education on Monday adopted a $41.8 million budget with no increase in the tax levy.
    The spending plan eliminates 24 full-time equivalent positions including 10 teachers, 11 support staff and three administrators, mostly through the closure of Mariaville and Woestina elementary schools at the end of the 2011-2012 school year, according to Superintendent Valerie Kelsey.
    “The closing of schools provided efficiency so we could have those staff reductions without hurting our programs,” she said.
    In February, the board voted to close both schools because of declining enrollment and rising costs, which is saving about $1.3 million — the bulk of the $2 million in budget reductions. Students in kindergarten through grade four will attend the sole remaining elementary school, Jefferson, beginning this fall. Fifth-graders will be housed at the middle school/high school campus.
    Kelsey said the community has been “wonderful” in its support in the transition. The Woestina PTO on Monday put on a dinner for the board.
    Woestina’s current principal, Shari Lontrato, will become the new director of pupil personnel services next year. ............................>>>>................................>>>>..................................http://www.dailygazette.net/De.....r01001&AppName=1