Pensions – Not So Boring Anymore…

In my deep past I wrote a paper for a college economics class.  I recall it was on a solid but boring topic for the time (mid – 70’s), related to pensions and the effect on budgets of mis-forecasting rates of return.  Now this was in an era when interest rates were boring, but soon they would not be so.  In the Seventies the big issue became inflation, or stagflation, which after the ’73 oil shock, started heading towards double digits.  At a time when inflation revolved around 10%, the question was can a pension then earning 9% keep up?

The yield problem, particularly for public sector pensions, has come home to roost in the current era of minimal inflation.  With nominal interest rates near zero, it is hard to achieve a return above 7%.  This is causing political problems for many municipal entities, a problem foreseen several years ago.

Responses have varied, but have come from both the right and left.  With the Tea Party behind him, Wisconsin Governor Scott Walker attacked the unions on collective bargaining rights, going after pay and pensions.  The left has taken up the call, as noted by Democratic advisor David Crane of California in 2010, “I have a special word for my fellow Democrats,” Crane told a public hearing. “One cannot both be a progressive and be opposed to pension reform.”  All this rancor over a bucket of money which has been promised to our public servants (teachers, fire, police, etc.).  But as Crane implied, in the current environment, keeping up with these fixed return obligations is threatening basic services like public schools and social services for the needy, not to mention fire, police, and garbage collection.

All this is being revisited across the country now, as an example New York City faces the prospect of an additional $1.9 billion in annual pension contributions due to a reduction in the assumed rate of return from 8% to 7%.  Its pension contributions currently make up 10% of the total operating budget.

With the majority of American workers now facing retirement with a combination of maybe a 401K yielding 2% and Social Security looking dicey, the public sphere is living in the past.  It is time for them to share the risks of the markets that we all do.  A promise to pay is one thing, a promised return is another.  It is time to put to bed traditional pensions for municipal employees, and the arcane activity of forecasting reasonable returns.

Rob Cannon is a frequent guest contributor at SMBmatters and is a principal at Cannonomics.  He is a virtual CFO for hire.

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Google Cloud : Working Together, Working Better

Wondering how with Google Business Apps, all your work gets saved automatically in the cloud? You will have access to your emails, calendars, documents and sites. You will be able to work securely no matter where you are or the device you’re using. This means your employees and everyone you work with can be productive from anywhere, using any of your devices with an Internet connection.

Apple Devices

Google Sync offers two-way synchronization between your Google Apps and your eMail, Calendar and Contacts apps on your iPhone and iPad.  Administrators will be able to choose mobile device management policies that are designed to keep your business information safe and secure. The policies include the ability to be able to remotely wipe data from any lost or stolen devices, requiring a device password, setting the password strength requirements, and best practices for data administrators.

Android Devices

Google applications will typically be pre-installed on most Android devices.  Sign in to your Android phone via your Google Apps username (or email) and password, calendar and contact information will be automatically synced on the go. You can use your Google Talk account to IM or video chat from your phone. Administrators can choose mobile device management policies designed to keep your business information secure as well.

Blackberry Devices

Google Apps supports two-way synchronization between Google Apps and the Email, Calendar and Contacts applications on BlackBerry devices by cooperating with a BlackBerry Enterprise Server. With the Google Apps Connector for BlackBerry Enterprise Server, administrators will be able choose mobile device management policies that are designed to keep your business information secure.

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Start Updating! iOS5 Released!

Get started with the iOS 5.1 update today! Apple brings 200+ new features for an even more superb operating system. There are bigger and better ways to communicate, not only through its primary messaging app, but with Twitter, your e-mail, and any other messaging apps of your choice. I’m sure the app market will continue to expand as well in concert with the improvements in iOS5, including new and improved game options.

If you’re a gamer, like me, I can point out a few choice games I play with my “free time” like: Draw Something, Hanging with Friends, Scramble with Friends, Scrabble and many more. These are just a few of their popular games that are still growing in the Apple App Store marketplace, give them a try, tell your friends and compete or play for fun.  Whatever you do just remember to enjoy your new iOS 5 update!

Games aren’t the only new addition.  There are now much better and more effective ways to communicate socially. You have your Twitter, you have your e-mail, Facebook, Tumblr, Google+, Instagram, OovooFaceTime, Skype and plenty more. The market constantly grows with the demands of those social butterflies among us.

If you’re into the media, don’t worry, there’s something for you too.  The App Store has plenty of those apps as well.  YouTube is always there and Spotify is a newer music media player that you can connect and synch with from your Facebook account, share playlists with friends and play it virtually anywhere!

Apple is always surprising consumers with their innovative products and ideas. We look forward to the next big Apple product which should be coming soon!

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Tidbits #14 – Hollywood’s Best Kept Secret

Well maybe it’s not the biggest secret…  But no one in the industry would completely admit to it…   For all practical purposes, movies have become a series of two and a half hour long commercials.   Hollywood would argue that ticket sales alone would not cut it – that commercial sponsorship is needed to generate quality content.

In reality product placement in films is roughly a $2BN industry.   Ever since Drew Barrymore enticed the alien out of hiding with Reese’s Pieces (versus Skittles), moviegoers have been bombarded with subliminal, if not overtly obvious commercial messages.   What’s next?  Comic strips?  Hmm…   Now there’s a business idea.   😉

What Do Resumes and Infidelity Have in Common?

They can both bring down mighty men…

Some recent examples are worth noting.  Coming in at the top of the list in the Resume Inflation Category – Scott Thompson (above left) was much heralded executive from PayPal, who was recruited to take the top post at Yahoo.  Unfortunately, he had a less than accurate major listed on his CV which got both him and a board member responsible for bringing him in fired.  The sad part – at this stage in Scott’s career, it would not have made any difference whether his undergraduate major was CS or English (he listed computer science only to have the university later make an official statement that it did not offer CS degrees until years after he graduated).  Ouch…

Honorable Mention (Resume Inflation Category) – former Notre Dame head coach for 5 days, George O’Leary, who falsely claimed a graduate degree in education which he never earned…  Again, he was and is a great head coach (currently at UCF, a program that’s on the rise) and that extra bullet would not have added anything to his coaching credentials.

The most recent example in the Infidelity Category – former Arkansas Razorbacks football coach Bobby Petrino.  Full Disclosure: I personally do not like Bobby Petrino (above right).  I didn’t like the way he left Louisville and Atlanta Falcons hanging; how he secretly met with Auburn where his former boss Tuberville was still gainfully employed; etc…  So when he appeared in a press conference looking all banged up and vulnerable, I had to chuckle and order another round for the table…  Genius of a football coach? Yes.  Unscrupulous human being?  Well, yes to that as well…  Rock-star status in Arkansas after registering its first 11-win season after four decades; father of four; affair with a 25 year old intern (who happened to be engaged to another person at the time); then lying to officials in a cover-up attempt.  What was he thinking?

Honorable Mentions (Infidelity Category)  Unfortunately, there are too many to mention in this category, from our beloved Magic Johnson, former CEO of HP Mark Hurd, elite basketball coach Rick Pitino, former CEO of Best Buy Brian Dunn to sports star and mogul Tiger Woods, who became the butt (no pun intended) of all infidelity jokes the last couple of years…

We’ve all made mistakes in our lives (and I get that), but it’s hard to give a hall pass to smart, powerful men who supposedly should know better, but act like they’re invincible and beyond the constraints of the moral compass that guides most of us.

Editor’s Note: The original title and content cast this article in the model of a top ten sports analogy, courtesy of the editors.  However, our contributor felt the import of the article was diminished, and successfully lobbied for his original title to be used.  We saw his point, and also caught the less than accurate description of “Grade Inflation” to describe what is more accurately “Resume Inflation”.

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Requiem / Paean for a Dot-Com Darling

It’s a tale that unfolds more than we care to count, but is heart-wrenching to see nonetheless.  We’ve seen it many times: a young star meets with great success early on.  Their ascent is met with many accolades and kudos.  Then, they fall from grace.  Scandal; missteps; a change in public sentiment.  No matter how hard they try, they can’t reverse their fall from the great heights.

Sock puppets and search engines

yahoo pets.comI’m talking, of course, about Yahoo!, the once-revered icon of the late 1990’s dot-com era.  Two young Stanford grad students, Jerry Yang and David Filo, unleashed on the world an indexing service that would help navigate journeys on the increasingly congested “information superhighway.”  In this context, Yahoo! was nothing short of revolutionary.  Even its silly name seemed to capture the slightly irrational, but very fun, mood of the time.  This was when “burn rate” was a proxy for a company’s growth prospects, Herman Miller chairs and foosball tables represented credibility, and Jack Welch could get upstaged by a sock puppet as a company spokesman.

I have fond memories of that era: it’s when I moved to Chicago, fell in love with the woman with whom I just celebrated 11 years of marriage, and arrived at the very satisfying answer to the Frequently Asked Question, “what the hell are you going to do with a History and French degree?”  It’s why I still have a great deal of affection for this Sunnyvale company, even after the Microsoft acquisition debacle, the dustup over Carol Bartz ignominious departure, and the Scott Thompson resume kerfuffle.

Having logged time at two financial services companies, I was obviously a big fan of Yahoo! Finance.  There were two services, however, that capture the era well.

Yahoo! MailWashington University alums will recall standing in line waiting for the sterile “green screen” terminals to check their “Pinemail” in the Olin Library.  I quickly tired of the clunky interface I used to check my email after leaving St. Louis, and abandoned my “@wustl.edu” account for a Yahoo! one.  Granted, I am on the whole underwhelmed by Yahoo! Mail, given their glacial pace of introducing upgrades, and the fact that their integration with Outlook is a joke.   However, my Inbox is an ever-evolving scrapbook, a digital collection of moments I’ve shared with friends, family, and professional connections.  It’s why even though I have a Gmail account I’m still not parting with my Yahoo! account.

Geocities.  Facebook, Twitter, YouTube, and Instagram have found a captive audience in folks looking for exposure – sometimes a little too much, as in the case of the “oversharenting” moms and dads examined in The Wall Street Journal.  It wasn’t always this easy.  I hate pulling out the “in my day” card, but you had to sort of know what you were doing in the late 90’s to publish content.  Geocities was the middle ground between Facebook and WordPress, that offered some primitive drag and drop tools for building and maintaining Websites.  Through Geocities I was able to share pictures with relatives in India, develop a Web portfolio to show hiring managers that a liberal arts grad could write code, and acquire a minor following from folks interested in sound clips from Goodfellas (one of my all-time favorite flicks).   Geocities has unfortunately gone the way of Delicious, Briefcase, and other sunsetted properties.

Holding out for a Hero (or a Good Product)

Ashton Kutcher was recently tapped to play Steve Jobs in an upcoming biopic.  At time of writing, if we were to associate a celebrity with Yahoo!, it would unfortunately be the likes of Lindsay Lohan or some other misstep-prone, washed up train wreck.  I’m holding out hope though.  Few seem to recall that the Apple of today was very much like Yahoo! before Jobs rescued it from the brink in the late 90’s – incidentally, while Yahoo! was riding high.  To win over the hearts and minds of customers and investors, Yahoo! needs to completely reinvent itself like Jobs did with the iPod, as opposed to half-baked, poorly executed attempts at innovation such as Livestand, and now Axis.

I’d like the next chapter of  the Yahoo! story to unfold like the amazing scene in Limitless when Eddie Mora shakes off the cobwebs, gets to work, and starts kicking some serious butt.  It would be nice for Yahoo! to replace “LiLo” with Bradley Cooper as the star with whom they are identified.  As talented as he is, however, I’m not sure Cooper could pull off the Jerry Yang look.  There’s always Eddie Murphy.

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