ALBUQUERQUE [1] – 12 months ago, the Chairman of the New Mexico Educational Retirement Board was managing a $9.4 billion pension fund, and now the fund’s worth has dropped to $6.6 billion.
This segment from KRQE, CBS News TV 13 in Albuquerque, pretty much speaks for itself. Note that the Madoff angle isn’t really material.
What’s so jaw-dropping awful about this is that it may well be a typical result for the year among its peers, from CALPers on down. So will every young civil servant in the Western World have to work five more years before they see a pension? The CPP, which is Canada’s equivalent of a Social Security fund, just reported an equivalent loss of 17 percent,[2] if I’m reading the story’s confusing presentation correctly. That sounds pretty good, but Quebec’s QPP is managed by Caisse, and I don’t think their figures (they are up to their necks in the ABCP mess) are in yet. If QPP goes south, there is no way that CPP doesn’t bail them out. Looks like fun times for actuaries.
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[1]: "NM Pension loses $3 billion in 2008: Some money invested with Madoff", by Dave Bohman, KRQE (CBS News TV 13, Albuquerque, NM, February 14, 2009.
[2]: "Canada Pension Plan Fund shrinks $8.5B in quarter: buying opportunities seen", by Gary Norris, CP / Macleans, February 13, 2009.
it is SICk when institutions make millions insignificant. In the scheme 10 million is insignificant. In the scheme of 1 trillion giving 10 million to track Canada geese is insignificant. This is the same ploy casinos use to transfer wealth, confuse the target and make the loss appear insignificant.
In my book, 100,000 is significant, 1,000,000 is more and 10,000,000 takes years of energy and effort to accumulate. The presant path of spending is sickening….