TOUGH ECONOMIC TIMES AND PUBLIC PENSIONS

I have reported on the unfunded liability for OPEB (Other Post Employment Benefits) to the tune of $3.5 billion dollars. Now I have been looking into the local pension funds. Generally, in the past, I have believed that they were in reasonably good shape compared to the reckless funds and excessive benefits seen in the past in places like San Diego and Houston. However with the severe downturn in the market I wanted to get a look at the current figures. Also there is a current investigation of possible pay to play actions by certain fund managers that has come to light.

I have requested and received annual reports from Memphis, Shelby County and MLGW. I have also received current monthly reports from MLGW and Shelby County. The City of Memphis has not sent the latest monthly report but hopefully they will in the next few days.

First, we all hope that the market will improve for our own investments and also for the pension funds. Regardless of your political persuasion, the last 25 years (excluding 2008) have been a good time for investments. However here are the facts from the annual MLGW report and from the current Shelby County monthly report.

• MLGW. Total recommended plan contributions for 2009 are $40+ million (26.7% of payroll), compare to $22 million (15.18% of payroll) for 2008. This is an increase for 2009 of $17.69 million.
  
• Shelby County's pension fund is down $325 million as of the end of March 2009 from the end of June 2008. This is a 32.3% drop. It is not know yet what the 2010 contribution requirement will be.
  

These are legal full faith and credit obligations for the rate payers and taxpayers of Memphis and Shelby County. No doubt the City figures will be the same or worse which is probably why they are dragging their feet in not letting me have the information. I have attached the MLGW and the Shelby County documents mentioned above.

Click here to read the December 31, 2008 MLGW annual pension report

Click here to read the March 2009 monthly Shelby County pension fund report