While athletic departments across the country lay off employees, UConn has largely avoided any layoffs. There's a reason why... (Borges)

[billybud]

I started buying mutual funds monthly as an automatic pay deduction back in 1980 when the dow was in the mid 800's....I had a reinvestment option so that nothing was ever cashed out.

Most of us do not invest young enough because who thinks that far ahead in their 20's? But early investment is the multiplier.

 

[JohnFSilver]

I started buying mutual funds monthly as an automatic pay deduction back in 1980 when the dow was in the mid 800's....I had a reinvestment option so that nothing was ever cashed out.

Most of us do not invest young enough because who thinks that far ahead in their 20's? But early investment is the multiplier.

I think we gotta be careful about the explosive gains of the last 40 years.

Technology has disrupted the stock market. We have much easier access to stock. That influx of capital has absolutely helped with captail appreciation. There is more money available to buy, which by default raises price.

What is the next disrupter that can give appreciation like tech stocks of the last 20 years? That and the banks have kicked ass (because the government saved them). I worry about GE, UTC (Raytheon) and other industrials. Consumer Discretionary is also a concern long term for me. I think Amazon is swallowing the world whole.

Also, as a matter of public policy, because everyone in the country is invested in the stock market the market takes on an outsized place in our policy. People hate seeing the natural economic cycle for businesses and we make short term decisions to prop up the market. Why? Because people's 401ks are vested in it.

The government intervention in the stock market through massive stimulus can't last forever. Can easy money and low fed rates last forever? Eventually, we get runaway inflation. Right?

I guess Paul Krugman would say I am crazy as long as the dollar is a fiat currency. But what is the upper limit of debt-to-GDP and how much can we hold?

I am conflicted here in many ways.

 

[BlueDogs]

It’s this power over the “negotiation” that makes unions for public service legalized extortion. Government and the tax payer have one lever to pull in this game and that is to understaff and that’s what we doing now. Some game.

Union labor at hotel or airline or mining operation etc all have market forces curbing abusive tactics. No such balance for governments except people voting with their feet.
When the pension bomb explodes the wealthy will already be gone leaving Joe lower middle class with the burden.

It’s actually worse than that because of mandated arbitration. Even if you vote everybody out, the system requires binding arbitration resulting in an unelected arbitrator making decisions which bind citizens with no say or ability to reject the award. It’s wholly out of control.

 

[Watchdog]

BTW, correct me if I am wrong, but isn't the state's pension fund invested in the stock market?

Who knows? It ought to be, but look how poorly UConn's endowment has grown compared to other schools.
Is that a function of low levels of giving by alums or poor investments? Could be both.

As a comparison, UConn's endowment is valued currently at $460 Million while Hillsdale College, a small liberal arts college with 1500 students, in Michigan, has an endowment valued at $528 Million.

As for the state, does anyone know the current levels of funding of the pension obligations and how well the pension investments are doing?

 

[JohnFSilver]

Who knows? It ought to be, but look how poorly UConn's endowment has grown compared to other schools.
Is that a function of low levels of giving by alums or poor investments? Could be both.

As a comparison, UConn's endowment is valued currently at $460 Million while Hillsdale College, a small liberal arts college with 1500 students, in Michigan, has an endowment valued at $528 Million.

As for the state, does anyone know the current levels of funding of the pension obligations and how well the pension investments are doing?

No idea why UConns endowment is still less than $500M. They have tried a lot of fundraising over the years. CT has a weird political class that hates the fact that that money is not controlled by politicos.

 

[noeynox]

Legacy employees are contributing on the order of 7% of pay, not nearly enough to reduce the huge liability at 80% of highest pay (which includes OT for public safety) for 20+ years of retirement. A 100k employee will net 80K a year which is $1.6 Million over 20 years, before healthcare benefits.

During negotiations state needs to try and get OT pay out of the calculations. State Police will be the loudest against this. Very few 100k employees are going to be drawing 80k pensions, and almost none after 20 years. After 20 years you are guaranteed 50% of the average of your highest 3 years. 2 percent for each additional year of service past your 20. This IS ONLY your hazardous duty employees which are a fraction of the state work force, and only Tier 1, 2, and 2A, have that current set up. Tier 3 and 4, have different arrangements.

Sadly many people take what you posted as the truth for every employee making 100k, they're going to retire after 20 years and make 80k. You couldn't even work that many overtime hours to pull it off.

Professors and judges on the other hand, though not as many take home some VERY handsome amounts for less than 20 years, in the case of judges. MUCH LESS.

 

[Adios]

Pensions will be useless when the world depegs the USD as the global reserve currency. Will be lucky to buy a loaf of bread.

 

[Watchdog]

If she was doing this in the private sector you’d be cheering her. She worked at a job for 40 years and I’d assume has one, but most likely two MAs given that salary. She contributed to the teacher retirement fund for 40 years. Teachers do not receive social security. Good luck recruiting/retaining teachers without the protection of a union. I assume you’d probably like to privatize education and have children attend Chuck E. Cheese Elementary School. Who exactly pays for that? What do you care, you’re in your 60s and done with children! Screw em!

President Franklin Delano Roosevelt, a much revered "progressive" president, opposed government unions engaging in or supporting strikes.

What FDR really said about public employee unions

I know some conservatives have used a quote by President Franklin D. Roosevelt as “proof” that even FDR was opposed to public employee unions, but let’s take a look at the full co…

bloggingblue.com

Roosevelt's thoughts on strikes: "Particularly, I want to emphasize my conviction that militant tactics have no place in the functions of any organization of Government employees. Upon employees in the Federal service rests the obligation to serve the whole people, whose interests and welfare require orderliness and continuity in the conduct of Government activities. This obligation is paramount. Since their own services have to do with the functioning of the Government, a strike of public employees manifests nothing less than an intent on their part to prevent or obstruct the operations of Government until their demands are satisfied. Such action, looking toward the paralysis of Government by those who have sworn to support it, is unthinkable and intolerable. It is, therefore, with a feeling of gratification that I have noted in the constitution of the National Federation of Federal Employees the provision that “under no circumstances shall this Federation engage in or support strikes against the United States Government.”

It seems likely he didn't foresee another issue that has become significant over the years: The unions put their money behind one political party and work in the campaigns to get them elected. They then negotiate with that party for pay and benefits. That party in turn "takes care of" the unions and the cycle repeats.The basic reason is broadly evident today.

 

[noeynox]

The state needs to adequately fund its pension obligations. The deal isn’t as good now as it was so many years ago.

And, should OT be calculated? And how are the earnings calculated? We can look at that, but that has to be collectively bargained. State Police union will never agree to a new way to calculate pension.

Your one of the few who posts on this topic who seems to have a grasp on things.

 

[Exit 4]

No idea why UConns endowment is still less than $500M. They have tried a lot of fundraising over the years. CT has a weird political class that hates the fact that that money is not controlled by politicos.

Very little of the New England/NY monied class with deep pockets studied at UConn, that is the first issue. The second issue, its a state institution and endowing the state seems less attractive to thrifty Northeasterners.

 

[Watchdog]

Teachers and janitors make too much? God forbid they have a degree of security in their life.

Teachers are either important or not. The state job is either important and necessary or not. If it is necessary, pay the people. Americans have taken it on the chin with regard to 401ks and health care for the last 20 years.

Pensions keep people in jobs and allow them security late in life. That allows them to leave the workforce and not have to work until death.

"Pensions keep people in jobs and allow them security late in life. That allows them to leave the workforce and not have to work until death."

As Margaret Thatcher famously said about socialism: "The problem with socialism is that sooner or later you run out of everyone else's money".

We might say the same thing about pension obligations. A significant number of states are on an inevitable path to bankruptcy as a result of overly generous pension obligations, many of which have been incurred as an easy means to ensure unions won't strike. At least 21 states are underfunded by over 30% on their pension obligations.

Take Illinois, for example:

https://money.usnews.com/investing/news/articles/2019-12-04/illinois-unfunded-pension-liability-rises-to-1373-billion

"Illinois spends as much on pensions as it does on welfare and public protection (that is, police and firefighters) combined, and nearly half of its education appropriations go toward teacher pensions. If the state’s pension plans reach insolvency, pensions could become its single biggest cost."

Who will pay? We can't print money forever even though our politicians think it's possible for as long as they want to stay in office and kick the liability down the road.

 

[UConnJim]

No idea why UConns endowment is still less than $500M. They have tried a lot of fundraising over the years. CT has a weird political class that hates the fact that that money is not controlled by politicos.

You have the UConn Foundation wrong. It is a political organization. In the mid 90s, when the endowment was tiny, they reached out to alums in the investment industry to jump start investing and they did a great job. I think one year, they had one of the best endowment returns among all colleges. I'm not sure what happened after than time, but if you look at the UConn Foundation today, the board is now 31 members with 9 ex-officio members. The board is made up of investment people as well as doctors, lawyers, business people, a basketball player. And, the CIO role is outsourced. In comparison, Harvard has 12 board members and 4 ex-officio members. Ten of the 12 board members are investment heavyweights. Harvard has a CIO. Who do you think is going to do a better job?

One other point on the endowment. The endowment does provide a relatively high level of support to the university compared to other schools, but I'm not sure if that is because a large amount of donations are slated for current year vs. going into the endowment. In FY 2019, UConn had an endowment of $462 million, donations of $71.4 million, and provided $44.4 million of support to the university.

 

[Watchdog]

Pensions will be useless when the world depegs the USD as the global reserve currency. Will be lucky to buy a loaf of bread.

It would be like Germany in the 20's, or Venezuela today.
China was reportedly taking actions to undercut the dollar a few years ago but may have backed off because if the dollar collapsed so would other currencies and even China couldn't survive that.

 

[JohnFSilver]

You have the UConn Foundation wrong. It is a political organization. In the mid 90s, when the endowment was tiny, they reached out to alums in the investment industry to jump start investing and they did a great job. I think one year, they had one of the best endowment returns among all colleges. I'm not sure what happened after than time, but if you look at the UConn Foundation today, the board is now 31 members with 9 ex-officio members. The board is made up of investment people as well as doctors, lawyers, business people, a basketball player. And, the CIO role is outsourced. In comparison, Harvard has 12 board members and 4 ex-officio members. Ten of the 12 board members are investm
ent heavyweights. Harvard has a CIO. Who do you think is going to do a better job?

One other point on the endowment. The endowment does provide a relatively high level of support to the university compared to other schools, but I'm not sure if that is because a large amount of donations are slated for current year vs. going into the endowment. In FY 2019, UConn had an endowment of $462 million, donations of $71.4 million, and provided $44.4 million of support to the university.

When i say politicos, there are people in government and the legislature that want full transparency of money. They want to spend it.

I don't know if the board is doing well or not. i just look at the top line number. I like the people at the foundation a lot and almost worked there on multiple occasions. I am for whatever gets the Foundation more money and am in huge agreement with where school is going. Why the school doesn't have a billion? I don't have any clue on the challenges of fundraising at a higher ed in the Northeast. When I engage, it is almost exclusively on networking, which I am a big proponent of. UConn grads should help get UConn grads opportunities.

 

[JohnFSilver]

It would be like Germany in the 20's, or Venezuela today.
China was reportedly taking actions to undercut the dollar a few years ago but may have backed off because if the dollar collapsed so would other currencies and even China couldn't survive that.

Reading Krugman's latest book and he talks about a lot of powerful fiat currency like the dollar, euro, pound, being immune to run away inflation. The scenario where the world dumps dollars and goes to the Euro or something else to peg their currency would scare me though. I guess the dollars true worth is only the paper it is printed on?

 

[Exit 4]

Reading Krugman's latest book and he talks about a lot of powerful fiat currency like the dollar, euro, pound, being immune to run away inflation. The scenario where the world dumps dollars and goes to the Euro or something else to peg their currency would scare me though. I guess the dollars true worth is only the paper it is printed on?

That is part of the new "modern monetary theory" policy shift the far left (and AOC) are pushing, that essentially we can print unlimited supplies of money to solve our problems because we have the world's only reliable base currency. My feeling is that is a very dangerous game and sure to have unintended consequences. For starters, currency's worth is a proxy for productivity. If you give everyone more cash tomorrow we will only be able to unlock so much more productivity and so new economic bubbles will be created (everyone will want a car, a vacation home, a vacation and a new phone) and yet the ability to provide all that wont match demand and thus prices will quickly rise wiping out the gain. Second, our currency is deemed trustworthy thanks to the integrity of the American government, our people and our politics. Printing money might work for a decade, but over that time the globe is going to work hard to find another currency because now the US Dollar has become a clear political tool that is no longer with integrity.

Once a country lacks currency credibility its very hard to regain your footing. Argentina and many places are good examples.

 

[BlueDogs]

During negotiations state needs to try and get OT pay out of the calculations. State Police will be the loudest against this. Very few 100k employees are going to be drawing 80k pensions, and almost none after 20 years. After 20 years you are guaranteed 50% of the average of your highest 3 years. 2 percent for each additional year of service past your 20. This IS ONLY your hazardous duty employees which are a fraction of the state work force, and only Tier 1, 2, and 2A, have that current set up. Tier 3 and 4, have different arrangements.

Sadly many people take what you posted as the truth for every employee making 100k, they're going to retire after 20 years and make 80k. You couldn't even work that many overtime hours to pull it off.

Professors and judges on the other hand, though not as many take home some VERY handsome amounts for less than 20 years, in the case of judges. MUCH LESS.

The tiering system does cut back no doubt. But, it’s long term benefits will not be felt until well after many here will see them.

 

[BlueDogs]

Reading Krugman's latest book and he talks about a lot of powerful fiat currency like the dollar, euro, pound, being immune to run away inflation. The scenario where the world dumps dollars and goes to the Euro or something else to peg their currency would scare me though. I guess the dollars true worth is only the paper it is printed on?

Won’t happen because the US backs it’s dollar by the only force in the world that can defend allied industrial nations against the economically malign forces of China and Russia. China really blew it with their aggressive posture in Asia. Even Vietnam is drifting into security alignment with the US, as is India, Malaysia, Indonesia, and the Philippines is reversing course from pulling away from the US. Europe refuses to fund at a level that puts them in a status to compete on a force level, and unless they are prepared to be world police forget the Euro taking over.

 

[UConnJim]

When i say politicos, there are people in government and the legislature that want full transparency of money. They want to spend it.

I don't know if the board is doing well or not. i just look at the top line number. I like the people at the foundation a lot and almost worked there on multiple occasions. I am for whatever gets the Foundation more money and am in huge agreement with where school is going. Why the school doesn't have a billion? I don't have any clue on the challenges of fundraising at a higher ed in the Northeast. When I engage, it is almost exclusively on networking, which I am a big proponent of. UConn grads should help get UConn grads opportunities.

Couple of things.

If UConn spent $8 million less from the endowment each year over the past 10 years, they probably would have added up to $125 million to the endowment. When you are growing a portfolio (or endowment), the most important thing is to invest early and let it compound. IMHO, UConn is spending too much of the endowment money each year which holds back the endowment growth which means lower returns in the long run. In other words, save today so you can spend more in the future.

As for raising money form alums, UConn has never been good at it, especially wealthy alums. Why? You need high powered fund raisers to interact with high powered donors. It's like sales. If you are selling to the CEO and/or the CFO of a company, you need a salesperson who is perceived to be a peer. You don't send in the junior salesperson.

 

[DoctorWho85]

Couple of things.

If UConn spent $8 million less from the endowment each year over the past 10 years, they probably would have added up to $125 million to the endowment. When you are growing a portfolio (or endowment), the most important thing is to invest early and let it compound. IMHO, UConn is spending too much of the endowment money each year which holds back the endowment growth which means lower returns in the long run. In other words, save today so you can spend more in the future.

As for raising money form alums, UConn has never been good at it, especially wealthy alums. Why? You need high powered fund raisers to interact with high powered donors. It's like sales. If you are selling to the CEO and/or the CFO of a company, you need a salesperson who is perceived to be a peer. You don't send in the junior salesperson.

My viewpoint as an alumni is that I already spent well over 80k in tuition, housing, food, textbooks, etc....they don't need anymore money from me.

 

[Chin Diesel]

My viewpoint as an alumni is that I already spent well over 80k in tuition, housing, food, textbooks, etc....they don't need anymore money from me.

An argument can be made that it cost UConn more to provide you your education- housing, facilities, land, professors, support, etc than you paid in tuition. In other words there was a discount built in to your education costs some of which came from alums before you donating in to the endowment.
UConn wasn't taking 5% of the money you paid to build up the endowment.

 

[Adios]

Reading Krugman's latest book and he talks about a lot of powerful fiat currency like the dollar, euro, pound, being immune to run away inflation. The scenario where the world dumps dollars and goes to the Euro or something else to peg their currency would scare me though. I guess the dollars true worth is only the paper it is printed on?

Krugman is lying. The gold standard was abolished for the world during WW2 and the early 70s for the US. Which is why the US dollar was "trusted" to be the reserve currency. No fiat currency stands the test of time; only will have real value to numismatists.

There's talk of a mixed basket of currencies, including metals, as a peg currency. Gold and silver have been peg currencies since ancient Greece and the Achaemenid empire until recently.

 

[Viet Vet]

My viewpoint as an alumni is that I already spent well over 80k in tuition, housing, food, textbooks, etc....they don't need anymore money from me.

Put your $80,00 to good use. YOU are an alumnus or alumna. Alumni is plural.

 

[Adios]

Won’t happen because the US backs it’s dollar by the only force in the world that can defend allied industrial nations against the economically malign forces of China and Russia. China really blew it with their aggressive posture in Asia. Even Vietnam is drifting into security alignment with the US, as is India, Malaysia, Indonesia, and the Philippines is reversing course from pulling away from the US. Europe refuses to fund at a level that puts them in a status to compete on a force level, and unless they are prepared to be world police forget the Euro taking over.

You might be surprised to learn "Pakistan" (should have reunited it with Afghanistan) is one of China's greatest strategic allies. How, I have no idea. Will be a world power in a matter of time and will be land used heavily for global commerical transport. Gives China access to the western Indian ocean.

 

[DoctorWho85]

Put your $80,00 to good use. YOU are an alumnus or alumna. Alumni is plural.

So sorry. I'm apparently not allowed to make a typo especially on my phone. Thanks for English lesson. I'll be sure to file that under you being an a hole.

 

[BlueDogs]

You might be surprised to learn "Pakistan" (should have reunited it with Afghanistan) is one of China's greatest strategic allies. How, I have no idea. Will be a world power in a matter of time and will be land used heavily for global commerical transport. Gives China access to the western Indian ocean.

I think that fits with the geopolitical realignment underway. India is a major counterbalance on China’s border and their shift towards the US defense sphere would make Pakistan a logical target for China by plying investment dollars into the Pakistani Army which controls huge swaths of their economy. It also opens a second front against India. The real test is whether the US and pacific countries will defend Taiwan. If they don’t, Chinese military aggression will not be restrained and a major global conflict will be inevitable at somepoint.

 

[Adios]

I think that fits with the geopolitical realignment underway. India is a major counterbalance on China’s border and their shift towards the US defense sphere would make Pakistan a logical target for China by plying investment dollars into the Pakistani Army which controls huge swaths of their economy. It also opens a second front against India. The real test is whether the US and pacific countries will defend Taiwan. If they don’t, Chinese military aggression will not be restrained and a major global conflict will be inevitable at somepoint.

Pakistan, somehow, was one of the first "countries" to acknowledge Chairman Mao. It's also a historic relationship. Let's just say it's very likely Pakistan and China will conquer Indian land.

Sadly, the US spent itself into oblivion. Russia wants Alaska back.

 

[LIUCHusky]

My viewpoint as an alumni is that I already spent well over 80k in tuition, housing, food, textbooks, etc....they don't need anymore money from me.

Sure hope their aren't many alumni that feel like you.

 

[jdb50]

I think that fits with the geopolitical realignment underway. India is a major counterbalance on China’s border and their shift towards the US defense sphere would make Pakistan a logical target for China by plying investment dollars into the Pakistani Army which controls huge swaths of their economy. It also opens a second front against India. The real test is whether the US and pacific countries will defend Taiwan. If they don’t, Chinese military aggression will not be restrained and a major global conflict will be inevitable at somepoint.

Taiwan is about 100 miles from China and has always been part of China. In the Korean War some folks like MacArthur wanted to have the Nationalist Chinese open a second front with an invasion of the mainland. If China was sending arms to a country 100 miles from our shore what would we think? The coming arms shipments from the USA will be a real test and I would not be surprised if Xi decides he will not allow them to be shipped there or will blockade them. It is an issue of national pride for them. Then we will see if we decide to have a global conflict as the ball will be in our court.

 

[Bongo Fury]

During negotiations state needs to try and get OT pay out of the calculations. State Police will be the loudest against this. Very few 100k employees are going to be drawing 80k pensions, and almost none after 20 years. After 20 years you are guaranteed 50% of the average of your highest 3 years. 2 percent for each additional year of service past your 20. This IS ONLY your hazardous duty employees which are a fraction of the state work force, and only Tier 1, 2, and 2A, have that current set up. Tier 3 and 4, have different arrangements.

Sadly many people take what you posted as the truth for every employee making 100k, they're going to retire after 20 years and make 80k. You couldn't even work that many overtime hours to pull it off.

Professors and judges on the other hand, though not as many take home some VERY handsome amounts for less than 20 years, in the case of judges. MUCH LESS.

What you said is more accurate. I would definitely sign up for most people think we make or benefits.