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How a Gang of Hedge Funders Strip-Mined Kentucky’s Public Pensions

theintercept.com

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Re: How a Gang of Hedge Funders Strip-Mined Kentucky’s Public Pensions

#91

Post by notfromhere »

Shivetya wrote: post #68
ChrisBland wrote: post #67

If any private company wanted to sell a financial product akin to public sector pensions they would be arrested and charged with fraud. Come to IL -- plenty of pension games to play here

the big story in Illinois is that even with proper management the Chicago pension system will be broke in about two years. however we cannot just vilify Illinois as many public employee pension systems have been built upon promises that are not sustainable and will leave millions with no real retirement as each fund implodes

the big story in illinois is that the state, across both parties and multiple governors, underfunded the pension to a tragic degree and now its at crisis proportions.

Re: How a Gang of Hedge Funders Strip-Mined Kentucky’s Public Pensions

#92

Post by [deleted] »

SilasX wrote: post #78
sp332 wrote: post #77

Earlier quoted context omitted.

But if the spouse did pay SS all their working lives, they should be able to get the benefits.

Ah, misunderstood that people were reacting to the second sentence ("because of this ..."). That part is definitely stupid. The "spousal benefit" should be considered as attached to the earner and should be unaffected the spouse's waiver of her own accrued SS benefits.

[deleted]

Re: How a Gang of Hedge Funders Strip-Mined Kentucky’s Public Pensions

#93

Post by toomuchtodo »

leetrout wrote: post #26

My mom is retired and part of the Kentucky Retirement System. Fun fact most people don't know about some of these- you forfeit your social security benefits when you participate. Because of this my mom cannot draw my dead fathers benefits. https://www.courier-journal.com/story/news/education/2018/03...

Would you be interested in speaking with a Congressional legislator to have this edge case addressed? While your mother waived her own social security benefits, public policy should allow her to collect her spouse's spousal benefit.

Re: How a Gang of Hedge Funders Strip-Mined Kentucky’s Public Pensions

#94

Post by pnutjam »

iflint wrote: post #47
dopamean wrote: post #27

Earlier quoted context omitted.

Don't BR ridiculous. There are lots of mutual funds that don't experience the swings that many hedge funds do.

There are many hedge funds with much lower volatility than the average mutual fund. Hedge funds are not inherently more or less risky than mutual funds, they are just actively managed instead of passively managed.

You mispelled "full of fee's that suck out the value."

Re: How a Gang of Hedge Funders Strip-Mined Kentucky’s Public Pensions

#95

Post by leetrout »

refurb wrote: post #76
leetrout wrote: post #26

My mom is retired and part of the Kentucky Retirement System. Fun fact most people don't know about some of these- you forfeit your social security benefits when you participate. Because of this my mom cannot draw my dead fathers benefits. https://www.courier-journal.com/story/news/education/2018/03...

The reason Kentucky teachers don't get Social Security dates back to 1935 when the Social Security law was enacted, leaving out state and municipal employees, said Beau Barnes, deputy executive director of the Kentucky Teachers' Retirement System, or KTRS...Teachers do not pay into Social Security but pay into their state retirement systems. It sounds like that was a conscious choice. It's not like it was taken away…

Correct but my dad worked his whole life and paid in to social security so I don't think it's fair she doesn't get his survivorship benefits.

Re: How a Gang of Hedge Funders Strip-Mined Kentucky’s Public Pensions

#96

Post by leetrout »

toomuchtodo wrote: post #93
leetrout wrote: post #26

My mom is retired and part of the Kentucky Retirement System. Fun fact most people don't know about some of these- you forfeit your social security benefits when you participate. Because of this my mom cannot draw my dead fathers benefits. https://www.courier-journal.com/story/news/education/2018/03...

Would you be interested in speaking with a Congressional legislator to have this edge case addressed? While your mother waived her own social security benefits, public policy should allow her to collect her spouse's spousal benefit.

I would. And others have tried to change this. It's very frustrating for me that she doesn't get what she should.

She also worked in private practice and I believe still had to pay into SS but at a reduced rate since wouldn't be able to draw.

I'm lee at lee trout dot com if you want to drop me a line.

Re: How a Gang of Hedge Funders Strip-Mined Kentucky’s Public Pensions

#97

Post by lotsofpulp »

mschuster91 wrote: post #90
lotsofpulp wrote: post #65

Earlier quoted context omitted.

I don't know what "flooding with cheap money" means, but by definition, if a buyer is outbid by another buyer for something, then the market price has changed so the previous buyer needs to update to the new market price. I don't understand how this is a waste of taxpayer money, since it properly indicates to people where resources need to be shifted (in order to bring prices down). Without this market mechanism, you…

> I don't know what "flooding with cheap money" means, but by definition, if a buyer is outbid by another buyer for something, then the market price has changed so the previous buyer needs to update to the new market price. Foreign money comes into a city and artificially (= not backed by local growth) drives up the prices, gobbles up the knowledge, then leaves. The city however is stuck with their now inadequately o…

Paying someone more cash and paying someone with a lien on future taxpayer funds for their annuities during retirement is the same thing, except the prior actually gets accounted for. The reason that your scenario can even come to pass is because of the obfuscation of operating costs caused by inaccurate accounting.

If "cheap money" floods into a city and causes salaries to go up and competition to increase, then in the next budget, the city will find that it will have to raise taxes. This will make the city less desirable for the "cheap money", hence reducing it. The reason you even see floods of money is because of arbitrage opportunities, and those are reduced when you have quicker price discovery.

Re: How a Gang of Hedge Funders Strip-Mined Kentucky’s Public Pensions

#98

Post by w1nst0nsm1th »

alistairSH wrote: post #63
tareqak wrote: post #52

Earlier quoted context omitted.

I want to say something beyond, “this is wrong”, but I haven’t the words. Does Kentucky not want teachers? There are shortages in some states.

No, they don't. To most of Kentucky's ruling class, public schools are evil. They'd love to see them all fail, so they can shift school funds to vouchers for Christian schools.[1][2] 1 - https://www.courier-journal.com/story/news/local/joseph-gert... 2 - https://www.mattbevin.com/issues

Belgium here. That story is one more issue that makes me literally think : "America is so broken". And most of the time republicans seem to have a big stake in it.

Re: How a Gang of Hedge Funders Strip-Mined Kentucky’s Public Pensions

#99

Post by IshKebab »

kasey_junk wrote: post #10
IshKebab wrote: post #4

TL;DR: dodgy hedge funds bribe politicians to invest public pension pots with them. I don't know why they don't just switch to private pensions. In theory public pensions should be less risky because the investment risk is spread between lots of people, but in practice it seems that the risk of management looting the fund is a much bigger concern, and one that you don't have with private pensions.

Colloquially in the US pension fund == defined benefit plan managed by your employer. A public pension would be managed by the government for governmental employees & a private pension would be managed by a private company for its employees. Defined benefit pensions largely only exist in the public sector in the US because they are phenomenally expensive. The reason public employees don’t want to switch is that these…

By private pension I mean a self-invested one. Essentially a trading account that you control.

In the UK they're called Self Invested Private Pensions.

Re: How a Gang of Hedge Funders Strip-Mined Kentucky’s Public Pensions

#100

Post by w1nst0nsm1th »

iflint wrote: post #47
dopamean wrote: post #27

Earlier quoted context omitted.

Don't BR ridiculous. There are lots of mutual funds that don't experience the swings that many hedge funds do.

There are many hedge funds with much lower volatility than the average mutual fund. Hedge funds are not inherently more or less risky than mutual funds, they are just actively managed instead of passively managed.

It reminds me a story in rare no-nonsense books on stock trading about 90% people losing money or doing less than stock index because of trading fees while activelly managing it. The ability to make good money in stock markets is a rare talent and hedge funds only make hedge fund managers rich, most of the time.
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