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Illinois Teachers Retirement System

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http://market-ticker.denninger.net/archives/2407-To-Illinois-Residents-Move.-Now..html

Seriously:

But when shown a seven-page list of derivatives positions held by the Illinois Teachers Retirement System as of March 31, obtained by Medill News Service through a Freedom of Information Act request, the University of Illinois-Chicago assistant professor of finance expressed disbelief.

Yes, derivatives. In teacher pension funds. How bad is it?

After losing $4.4 billion on investments in fiscal year 2009, and 5 percent on investments in fiscal 2008, the teachers’ pension is now underfunded by $44.5 billion, or 60.9 percent, according to the Commission on Government Forecasting and Accountability’s March 2010 report.

They have 40 cents of every dollar they need.

So what does someone who has no accountability - that is, who won't be jailed if they make it worse rather than better, do?

Why they go to Vegas and bet it all on Red with a crooked croupier in a crooked casino!

Seriously.

The teachers’ fund denies it’s currently losing money on its derivatives, and in a statement said its investment strategy, which has included OTC derivatives for the past 27 years, is up 9.7 percent during that same time period. That’s better than the fund’s 8.5 percent target return rate

Lehman was doing really well too. Right up until they blew up.

A target 8.5% return rate eh? That's suspiciously close to the 8.3% debt growth numbers from 2000 onward in the general economy!

That won't work when the average economic growth rate over the same period is about 5.2%. Indeed, it is that idiocy that led to the collapse.

We doubled systemic debt from 2000 to 2010, roughly. That's clearly what they're trying to do with their "target", but it will fail unless we can double outstanding credit again in the next ten years, and we can't cover the debt payments at their present level.

But right now, TRS is largely on the risky side of the contracts, selling and writing OTC derivatives, including credit default swaps, insurance-like contracts that guarantee payment in the event of a default, that were blamed in part for the 2008 collapse of Lehman Bros. and bailout of insurance giant American International Group Inc., or AIG.

Writing uncovered derivatives? Oh yeah, that's real smart. They're effectively short volatility, which is a grand thing to be while the financial stability of nations is in question.

Tell me again how they get to do this? What their capital base is for it?

Oh yeah, it's you, the Illinois taxpayer, who will be required to make up the shortfalls when (not if) this blows up in their face.

Get the hell out of Ill-noise folks. Right now.

Oh, if you're an Illinois teacher?

Your pension is toast.

Mark my words.

Are the regulations on UK pensions different to in the US? Or will some of our pension funds be pursing the gold at the end of the rainbow?

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Guest sillybear2

It could be worse, the Teachers Retirement System of Alabama has 4.5m shares in BP.

The New Jersey Division of Investment (51 million shares)

The California Public Employees Retirement System (36 million shares)

The Pennsylvania Public School Employees Retirement System (7.1 million shares)

The Teachers Retirement System of Alabama (4.5 million shares)

The Employees Retirement System of Texas (4.1 million shares)

The Ohio Public Employees Retirement System (1.1 million shares)

The Illinois State Board of Investment (1.1 million shares)

The Indiana Public Employees' Retirement Fund (0.7 million shares)

The Washington State Investment Board (1.2 million shares)

Of special note, the United Nations Joint Staff Pension Fund holds 21.9 million shares of BP. (Oil for pensioners food programme?)

Edited by sillybear2

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The teachers in Wisconson did the same thing.

They took a lot of leveraged risk to try to make up shortfalls in their portfolio and naturally cried "misselling" when things went against them.

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http://market-ticker.denninger.net/archives/2407-To-Illinois-Residents-Move.-Now..html

Are the regulations on UK pensions different to in the US? Or will some of our pension funds be pursing the gold at the end of the rainbow?

Well, the public sector pensions are paid by you and I so our teachers, nurses, police officers, etc, are gold-plated safe.

A friend of mine was telling me that his borther-in-law, Police Inspector, is retiring in 2 years at 50 and will have a bigger pension than my friend earns in salary.

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Guest sillybear2

The teachers in Wisconson did the same thing.

They took a lot of leveraged risk to try to make up shortfalls in their portfolio and naturally cried "misselling" when things went against them.

Hey, it worked for Orange County... oh, it didn't.

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Guest Noodle

Not sure if it's the same for teachers, but an old US mate, was a vice cop in East Brooklyn during the 70's, started drawing his police pension . . . the day after he retired . . . at 42!!!

Where's all this money coming from to pay for all this he asked. I just told him 'a big printer and tungsten bars painted yellow'.

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Well, the public sector pensions are paid by you and I so our teachers, nurses, police officers, etc, are gold-plated safe.

A friend of mine was telling me that his borther-in-law, Police Inspector, is retiring in 2 years at 50 and will have a bigger pension than my friend earns in salary.

So being paid not to work.

How many years service has he managed in the police?

No doubt fit and healthy and possible live till 80+ on a nice indexed linked pension?

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So being paid not to work.

How many years service has he managed in the police?

No doubt fit and healthy and possible live till 80+ on a nice indexed linked pension?

Joined at 18 I think my mate said.

It can't be right can it.

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Joined at 18 I think my mate said.

It can't be right can it.

Works for 32 years and then gets to retire he would hope for another 32 years. I would love to know the maths behind this pension scheme.

Is he Greek by any chance? :P

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My mates brother retired at 50 from the police force last year. She has hinted (rather enviously) at his pension being somewhere between £50,000-£70,000.

Six months into retirement he took a middle management job at the local council.

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Guest Noodle

My mates brother retired at 50 from the police force last year. She has hinted (rather enviously) at his pension being somewhere between £50,000-£70,000.

Six months into retirement he took a middle management job at the local council.

It's madness.

In retirement (as I'm currently yet involuntarily finding out) living costs can in fact be surprisingly low. One has time to make efficiencies yet maintain a standard of living. (Notice I didn't say what standard of living).

Minimum I reckon is £9-10k a year. Tops, £18k a year if you're posh, which obviously I ain't.

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My mates brother retired at 50 from the police force last year. She has hinted (rather enviously) at his pension being somewhere between £50,000-£70,000.

Six months into retirement he took a middle management job at the local council.

One of my "rules" for the Big Society is that people should only be allowed to draw on one source of public funds. The double dipping that occurs should really be banned. Pick a publicly funded pension or a publicly funded job but not both.

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Imagine my mates brother living until he's 75 or 85. That would be 25 or 35 years on minimum £50,000pa. His wife (also in public sector middle management) is 12 years younger than him. So as well as her retiring on a good pension she will also be in line for roughly half of her husbands pension once he dies. Let's assume she lives until she is 90. How much is that being paid for years into the future whilst not working. It really is incredible.

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My mates brother retired at 50 from the police force last year. She has hinted (rather enviously) at his pension being somewhere between £50,000-£70,000.

Six months into retirement he took a middle management job at the local council.

must have been on 100k salary in the first place - senior position?

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My mates brother retired at 50 from the police force last year. She has hinted (rather enviously) at his pension being somewhere between £50,000-£70,000.

Six months into retirement he took a middle management job at the local council.

I take it he's joined their pension scheme...

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Guest sillybear2

Imagine my mates brother living until he's 75 or 85. That would be 25 or 35 years on minimum £50,000pa. His wife (also in public sector middle management) is 12 years younger than him. So as well as her retiring on a good pension she will also be in line for roughly half of her husbands pension once he dies. Let's assume she lives until she is 90. How much is that being paid for years into the future whilst not working. It really is incredible.

It's not going to work, we'll be bankrupt before then, the real value of these pensions will be greatly reduced when they take to pumping the money supply and blatantly rigging the RPI index.

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one thing in favour of generous benefits for the police is difficulty of recruitment. they really can be the difference between order and the jungle. perhaps a price worth paying, in their specific case?

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Guest sillybear2

one thing in favour of generous benefits for the police is difficulty of recruitment. they really can be the difference between order and the jungle. perhaps a price worth paying, in their specific case?

Weren't we given the same excuse about the "low pay" of firemen during their strike, and it turned out there was already about 50 applicants for every job opening?

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11% contribution to the pension from the net salary.

Up to 20 years service, they get 1/60 of average pensional pay (APP) per year

Up to final 10 years of service (normal maximum being 30 years service), they get 2/60 of APP per year.

Gives a grand total of 40/60 or 2/3 of APP.

If your APP is £36,000, then you get a pension of £24,000.

You can commute a quarter of the pension to a lump sum, multiplied by an age factor. So, £24,000 / 4 = £6,000 multiply by 15 (for a male under 51) and you get a commutation of £90,000, leaving a pension of £18,000 pa.

Source pdf

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Weren't we given the same excuse about the "low pay" of firemen during their strike, and it turned out there was already about 50 applicants for every job opening?

true...

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Well, the public sector pensions are paid by you and I so our teachers, nurses, police officers, etc, are gold-plated safe.

A friend of mine was telling me that his borther-in-law, Police Inspector, is retiring in 2 years at 50 and will have a bigger pension than my friend earns in salary.

No NI on pensions either so his take home will be significantly more. Then he can always get a second job like so many ex-police do. For some reason they are not seen as coffin fodder like the made redundant type of 'boomer'. Alternatively he may be able to use his spare time managinging his BTL portfolio, picking up a few 'jet to let' properties. or putting a toe into pwoperdy development. The world is his oyster.

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No NI on pensions either so his take home will be significantly more. Then he can always get a second job like so many ex-police do. For some reason they are not seen as coffin fodder like the made redundant type of 'boomer'. Alternatively he may be able to use his spare time managinging his BTL portfolio, picking up a few 'jet to let' properties. or putting a toe into pwoperdy development. The world is his oyster.

.......I meant another job whilst drawing pension rather than a second job. That post was number 666........scary

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Imagine my mates brother living until he's 75 or 85. That would be 25 or 35 years on minimum £50,000pa. His wife (also in public sector middle management) is 12 years younger than him. So as well as her retiring on a good pension she will also be in line for roughly half of her husbands pension once he dies. Let's assume she lives until she is 90. How much is that being paid for years into the future whilst not working. It really is incredible.

An annuity to provide this sort of income would surely need a pot in excess of £1m. These are the real 'boomers'.

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An annuity to provide this sort of income would surely need a pot in excess of £1m. These are the real 'boomers'.

£2 million for this pot

would normally need to have invested the equivalent of about £1000 a month over 30 years to achieve this

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  • 192 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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