Someone agrees about pension funding

15 September 2017

From the San Diego Union-Tribune, an article about pension funding that cites my article:

If you’re a homeowner, you probably have a 30-year mortgage. Your mortgage allows you to own your home without fully funding the purchase. If, for example, you have a $300,000 home with a $150,000 mortgage, it might be said that your homeownership is at a 50 percent funded ratio. That’s not reckless; it’s prudent use of debt.

...

Some people speculate that future investment returns will be lower than past returns, requiring higher contributions from workers and taxpayers to sustain pension funds. In truth, no one knows.

The prudent course is to review returns each year and make gradual course corrections, as needed. That’s why independent auditors regularly evaluate and advise public pension funds on necessary course corrections.

So when you hear concerns about public pensions being underfunded, understand that ensuring 100 percent funding isn’t critical to the healthy functioning of a public pension system, and it can be very expensive.

 

Planning for another rainy day

29 August 2017

Seems like time to remember that this kind of thing doesn't only happen in Houston, and Houston isn't the only place where out-of-control land use makes a bad situation into a disaster.

Good story about the problem. Money quote: "Storms are natural events, but floods are usually man-made disasters."

Older story here

I visited the floodway last year, and it was easy to feel sympathy for the people who live nearby. It's not fair, they said. Every other town has a levee. Why should we have a gap?

The original answer, of course, was that the river in flood needs outlets for its excess water. That some areas need to be sacrificed so that more populated areas can be protected. That a levee would destroy even more wetlands along the river while encouraging even more development in a flood plain that wasn't supposed to be developed in the first place.

But it is developed. Almost the entire basin is developed.

Now what are we going to do about it?

Rhode Island BankLocal Succeeds

17 August 2017

As received from Treasury (yay!):

Treasurer Magaziner's BankLocal Program Moves $15 Million to Local Banks and Credit Unions to Support 150 Small Business Loans

PROVIDENCE, RI - Rhode Island Treasurer Seth Magaziner today announced that his BankLocal program has moved $15 million in state deposits to local banks and credit unions, matching loans to more than one hundred fifty small businesses in Rhode Island.

"I am committed to using the Treasurer's Office to encourage economic growth and job creation in Rhode Island," said Treasurer Magaziner. "Our BankLocal program is improving access to capital for Rhode Island small businesses by depositing cash at local banks and credit unions that are supporting Rhode Island entrepreneurs."

The BankLocal program moves a portion of the State's cash into secure accounts at local banks and credit unions. The amount deposited in each lending institution is determined based on loans made to small businesses in Rhode Island.

"For over 100 years, Navigant has been delivering on our commitment to serve the communities where we operate," said Gary Furtado, CEO of Navigant Credit Union. "The early success of this innovative program highlights the value of collaboration between government and the business community."

Eight Rhode Island banks and credit unions have joined the BankLocal program. To date, more than $15 million has been deposited to local banks and credit unions, matching over 150 qualifying local small business loans.

Jairo Echeverry, owner of Budare Grille in Central Falls, RI is a small business owner who received a BankLocal supported loan from Navigant Credit Union. "As a small business owner, working with Navigant has been a great experience. Their loan officer took the time to really understand my business needs," said Echeverry. "I am happy that the Treasurer's Office is working to provide financial support to small businesses through the BankLocal program."

Deposits into participating banks and credit unions will typically match the amount lent to qualified small businesses in Rhode Island, who employ fewer than 100 employees. Loans to women and minority-owned businesses and businesses founded by first-time entrepreneurs are eligible for a 2-to-1 matching deposit into the lending bank or credit union - up to $250,000 per loan.

"Bristol County Savings Bank is pleased to be part of the BankLocal program," said Patrick Murray, President & CEO of Bristol County Savings Bank. "The Bank's new collaboration with Treasurer Magaziner's office supports small businesses, which are the backbone of the local economy."

Participating financial institutions must meet minimum requirements for financial soundness, including proof of FDIC or NCUA insurance, and all state cash deposits must be fully collateralized.

No pension money is used for the BankLocal program and the Rhode Island Treasury has no role in selecting or approving small business borrowers. Lending decisions are made solely by participating banks and credit unions. Participating lenders include BankRI, Bristol County Savings Bank, Centreville Bank, Customer's Bank, Home Loan Investment Bank, Navigant Credit Union, People's Credit Union, and Washington Trust.

More information at www.treasury.ri.gov/banklocal

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