I'd ask for a risk assessment of pension assets in the case of either a 2000 or 2007 bubble bursting. How vulnerable are the assets? And what happens if the returns are say 0% or negative in a year. How does that affect the budget.
$2 bn is woefully inadequate as a rainy day fund. That's less than 2% of expenditures. What are the benchmarks for other large cities and for states?
Pensions are a big complicated topic, so it was a decent learning curve for me to even scratch the surface here. I'm looking forward to learning more and supporting the team!
hot take: public pensions need to be updated. they were designed for a different era, when people stayed in one job / career for decades and then had (hopefully) 15 yrs of retirement. maybe we need to pay people a lot more while they are working instead of tying everything to a giant long-term payment plan?
I love a hot take!!🔥I agree, the current system doesn't allow a ton of flexibility for city workers. And yet I'm jealous because a pension sounds pretty sweet. I wonder if there's a way to provide employees choice: opt into the pension or get more pay and a 401k.
Sachi,
I'd ask for a risk assessment of pension assets in the case of either a 2000 or 2007 bubble bursting. How vulnerable are the assets? And what happens if the returns are say 0% or negative in a year. How does that affect the budget.
$2 bn is woefully inadequate as a rainy day fund. That's less than 2% of expenditures. What are the benchmarks for other large cities and for states?
Ooh such good questions! These are going to my to-do list for follow-up. Thanks David!
You raise some excellent questions Sachi!
Pensions are a big complicated topic, so it was a decent learning curve for me to even scratch the surface here. I'm looking forward to learning more and supporting the team!
hot take: public pensions need to be updated. they were designed for a different era, when people stayed in one job / career for decades and then had (hopefully) 15 yrs of retirement. maybe we need to pay people a lot more while they are working instead of tying everything to a giant long-term payment plan?
I love a hot take!!🔥I agree, the current system doesn't allow a ton of flexibility for city workers. And yet I'm jealous because a pension sounds pretty sweet. I wonder if there's a way to provide employees choice: opt into the pension or get more pay and a 401k.
Simple solution: stop the city from dipping into pension returns. It's absurd the city has any right to the accumulated wealth of its workers.
Thanks Faraz! Not sure there's any simple solutions, since changing process can be very tough. But that's what I'm keeping in mind too.