Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Snowshoe who wrote (36847)	8/1/2003 6:13:32 AM
From: Snowshoe	Respond to of 74559

Alaska pension fund almost $2.5 billion in the hole RETIREMENT: Communities, school districts will have to pay more to offset shortfall. adn.com The Associated Press (Published: July 28, 2003) FAIRBANKS -- The fund in which the state holds pension money for its employees and for communities and groups that subscribe to its pension plan is almost $2.5 billion short, according to recent figures. The shortfall is being blamed on skyrocketing health-care costs combined with a lackluster stock market in the last few years. The state's teacher retirement fund is also about $1.7 billion short of the money it needs to pay out retirement benefits. To deal with the deficits, the state plans to dramatically increase the amounts that communities and other entities will have to contribute to the plans, adding to the problems that many already face because of the loss of state revenue sharing. "It's huge for the state and it's huge for all the municipalities," said Kevin Ritchie, president of the Alaska Municipal League. About 150 communities, school districts and other entities, including the state itself, use Alaska's Public Employees' Retirement System to fund pension plans and post-retirement health care for employees. Each entity and each enrolled employee contributes a certain amount each year into the plan, with the contribution rates adjusted annually by the state based on estimates of how much is needed to pay for the plans' benefits. In the 2003-04 fiscal year, the average community or organization is putting $6.77 toward the fund for every $100 paid in salary to each enrolled employee. Contributions go into a state investment fund, which, during the flush stock market years of the late 1990s, earned more than enough to keep rates low while still holding the fund's level above the estimated amount needed to pay for the pensions and health care of all the people on the plan. But then the stock market began a nose dive. In 2001-02, the fund, which is expected to earn 8.25 percent a year, lost 5.25 percent, or $458.4 million. In 2002-03 it lost 5.48 percent, or $431 million. Meanwhile, rising health-care costs pushed the fund's liability from $7.9 billion in mid-2001 up to $9.9 billion in mid-2002, the latest numbers available. "They got two years of 5 percent losses when they were looking for 8 percent gains," said Gary Bader, chief investment officer of the state Department of Revenue. "That, combined with an escalating health-care cost ... is really what has impacted the system to the largest degree." With the value of the fund at $7.4 billion on June 30, 2002, the state of Alaska was about $2.5 billion in the hole. The state's Teachers' Retirement System fund is also short: In mid-2002, that fund fell to $3.7 billion in value versus liabilities of $5.4 billion. Those gaps are often referred to as an "off-books debt" because they aren't, in the strictest sense, tangible debts that will come due at a specific date. Rebounds by the funds could decrease or even erase them. But they still represent money that is expected to be paid into the funds, by subscribing communities and by the state itself, in order to pay for benefits. The state itself is indebted $1.4 billion. That will have to be repaid over a 25-year period set by the state, which means substantially increasing the contribution rates of communities and other entities. Employee rates are frozen by law. To pay back PERS, Alaska would have to raise the average rate paid by communities from 6.77 percent to 24.9 percent, or $24.90 per $100 salary. But by state law, the rate can only be raised 5 percent a year, so in the fiscal year beginning in 2005, the average rate will go up to 11.77 percent. The rate will likely go up another 5 percent each year for two to four years beyond that. In the Teachers' Retirement System, organizations are paying 12 percent this year but would have to pay 35.6 percent to pay off the debt over 25 years. The board that sets TRS rates voted to raise it to 16 percent in the 2004-05 fiscal year, and like the PERS rate, it will likely continue to increase.

To: Snowshoe who wrote (36847)	8/1/2003 2:03:09 PM
From: Cogito Ergo Sum	Read Replies (1) \| Respond to of 74559

Speaking of Anchorage isn't that approaching half the population of Alaska... Pretty crowded LOL .. Anchored Down in Anchorage - Michelle Shocked I took the time to write to my old friend I walked across the burning bridge I mailed my letter off to Dallas, but Her reply came from Anchorage, Alaska She said Hey girl it's about time you wrote It's been over two years now my old friend Take me back to the days of the foreign telegrams And the all night rock 'n rollin' hey Chel We was wild then Hey Chel you know it's kinda funny Texas always seems so big But you know you're in the largest state in the union When you're anchored down in Anchorage Hey girl I think the last time I saw you Was on me and Leroy's wedding day What was the name of that love song you played I forgot how it goes, I don't recall how it goes Anchorage, anchored down in Anchorage Anchorage, anchored down in Anchorage Leroy got a better job so we moved Kevin lost a tooth, he's starting school I got a brand new eight month old baby girl I sound like a housewife I think I'm a housewife Hey girl what's it like to be in New York New York City, imagine that, tell me What's it like to be a skateboard punk rocker Leroy says send a picture Leroy says hello Leroy says keep on rocking girl Yeh keep on rocking Hey Chel you know it's kinda funny Texas always seems so big But you know you're in the largest state in the union When you're anchored down in Anchorage regards Kastel