Sunday, August 7, 2011

Terrence McGuire handles 450 Billion dollars for our State and helps me uncover a Billion dollar heist by Santa Barbara (SBCERS) pension Officials

 If Mr. McGuire performed his sworn duty that would be the correct title for this posting.

  Now recently I shared with you all that the California State Controllers Office had responded to some of my concerns with the SBCERS pension. The controller's office did a poor job of summarizing my concerns in this email; “Thursday, July 21, 2011 4:10 PM
To: several people Subject: Retirement Publication Question -I’ve got a question on our retirement publications (archived audits) – and specifically about the Santa Barbara County System(SBCERS).  Apparently, past year amounts for actuarial accrued liability and the actuarial value of assets changes in reports issued for subsequent years.  (The years I’m looking at are from 1988 – 1996.)  Can you refer me to someone who can provide an explanation or some background (to satisfy Larry Mendoza)?
 Thanks xxxxx
 The first question that came to my mind was just who did the Controllers Office chose to help assist me with resolving these concerns of mine? So I Googled Terrence McGuire and look at what I found;
Controller Chiang Names Terrence McGuire as Deputy Controller for Investments
SACRAMENTO – State Controller John Chiang today announced the appointment of Terrence J. McGuire as Deputy Controller for Investments, effective August 6. As the Controller’s representative on the California Public Employees’ Retirement System/California State Teachers’ Retirement System (CalPERS/CalSTRS), the nation’s two largest public pension fund boards,
 All I could say after seeing that was wow here Mr. McGuire's responsibilities include the management of over 450Billion dollars and he was working with me. Now initially Deputy Controller McGuire gave me the impression that he was serious about investigating my questions. He Started out with a let me see what we can do attitude but then he ended with an attempted brush off saying that there was nothing to address.
 I hope Mr. McGuire is not under the impression he has answered my concerns and I will go away, we all know better than that. Even his own office recognized the importance of my concerns and labeled them as high in regards to importance ontheir email. By reading the email they also confirm one of my concerns that some how data and fund values had been retroactively altered between 1995-and 1996. Still I have not heard from our Santa Barbara County Government or Auditor-Controller Robert Geis about these issues.
 After all that my real concern is the math used with the SBCERS pension records. What I am trying to share with you all here is this. That I have found through research that the SBCERS pension fund was 102% funded way back in 1986. And not 67% as later pension records (2009) would have you believe. Based on these next two documents how can anyone dispute my findings that the SBCERS pension history has been falsified in later years?

Look at the Values and funded levels for 1986 and 1988 as found on Wall Street Bond documents. These numbers show 102% and 91% funded which contradict the next document that was created in 2009. 

How can this 2009 documents funded ratios differ from the document above by over 32%? So the question is which document is the correct pension fund value?

While eating at Los Amigo's Cafe
this morning I spoke with friends on this subject. I provided the documentation that I used for my findings and they too feel my challenges to past pension values is a valid one.

If you start with a 102% funded pension(1986), add a continues over performance of investments and finish with contributions that exceeded the requirements. Mathematically a deficit for the pension fund is not possible. I hate to sound elementary but these three positive factors will not allow for a negative future obligation balance(UAAL).
 I found this data in a July 1st 2009 response letter to the Santa Barbara Grand Jury, addressing concerns from a 2008-09 report;Response to finding 4 (found on page two) “We (the Santa Barbara County Board of Retirement) disagree wholly with the finding. As reported in the 2006 actuarial experience study, as of June 2005 the fund’s 18-year compound average net return on assets was 9.7%. Since that time the fund earned 10.8% in 2006 and 17.2% in 2007, and lost 7.1% in 2008.”  

But wait lets do some more math here.

So I found the SBCERS pension funds net return on investments between 1987-2005 was a documented 9.7%. The funds net return on investments between 1987-2011 is a documeted 8.85%. The funds net return on investments between 1984- 2011 is a documented 9.45%! All the return earnings easily exceed the 26 year assumption rate of 8%. so once again I ask just how is Santa Barbara County residents responsible for a phantom 1 Billion Dollars?
 As you can see if the only answer two questions here they would be;
1- What is the true value and funding ratio of the SBCERS pension december 31st1986/
2- If question one is answered 102% and 225 million dollars how can we currently have a Billion dollar (UAAL) future underfunded pension obligation?
We have the makings of a BILLION DOLLAR SCANDAL by Santa Barbara County Government and their RETIREMENT BOARD!
 Our elected county officials can duck me for a while but sooner or later myself or others will appear before them and ask those questions.
 I hope you find this posting worth sharing with your friend, family and acquaintances.
 Larry “Magic” Mendoza

S.B.C.C.C. The place where COMMON SENSE never goes out of style!

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