FPPTA
October 2010
Florida Public Pension Trustees Association P R O V I D I N G T R U S T E E E D U C AT I O N A N D I N D U S T R Y I N F O R M AT I O N I N A N E F F O R T T O P R O T E C T DEFINED BENEFIT PLANS.
Message from the CEO Raymond T. Edmondson, Jr. At our September Trustee School, held at the PGA Resort in Palm Beach, FPPTA members were told about our efforts over the past year to assist in bringing their message to the public. Our Town Hall Meetings have been a great success in bringing municipal commissioners, elected officials, financial managers and employees together to look more closely at the strengths of defined benefit plans. Our initiatives in placing opinion columns in major daily newspapers across the state also have brought our message to voters and taxpayers. Our mission to educate public pension trustees has expanded to include educating public officials and the general public as well, and we expect to continue those efforts into the coming year.
Letter to the Editor The letter to the editor (next page) has been prepared for distribution by the FPPTA to major newspapers across the state of Florida in the weeks coming up to the November mid-term elections. It is a critical time to remind voters of how important it is to stay focused on the need for quality public services and to reinforce our belief that voters should not become distracted by scare tactics about the strength of their public institutions. We hope you will consider adding your board’s endorsement to this message by distributing it to your local newspapers. The letter to the editor can be found on page two. We would greatly appreciate it if you would forward the attached letter to your local newspaper. Sincerely,
Raymond Edmondson, Jr., CPPT, CEO Florida Public Pension Trustees Association
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Dear editor,
Conservative tax-watchdogs are inciting voter anger during this election cycle by promoting the idea that more public employees ought to join the ranks of private sector unfortunates who have lost jobs and benefits since the 2008 crash. Special interest groups, including the Florida League of Cities, are misleading the public about the cost of public pension benefits, all the while feeding taxpayers’ fears that public pensions are unsustainable. They are not. Public pension critics want taxpayers to get a ‘bailout’ and relief from their responsibility to finance municipal services and benefits. They also want public employees to trade defined benefit pensions for defined contribution, 401(k) accounts. Sounds good to angry voters, but public employees experience the same catastrophes as private workers when jobs are lost, benefits are cut, and security is denied. The fact is that public pension funds also suffer – just like private 401(k) accounts – in a down market. Critics point to large unfunded liabilities to claim public pensions are unsustainable, but there is good news. Investment markets will recover, benefiting both the private and public sectors, and current unfunded liabilities will shrink commensurately. Voters should know that even in this market, as much as 70 percent of pension benefit payouts come from earnings on the fund, and payout cycles average at least 30-years, making complete economic recovery likely. Public pension plans work in perpetuity – always drawing upon the participation and contributions of new hires that will support the plans for decades. Fear mongering is a shabby political tactic. Defined benefit pensions are both efficient and sustainable. Please visit www.fppta.org for more information.
Raymond Edmondson, Jr., CPPT, CEO Florida Public Pension Trustees Association 2946 Wellington Circle East Tallahassee, FL 32309 Phone: 800-842-4064 Fax: 850-668-8514 fppta@fppta.org http://www.fppta.org
FPPTA Fall Trustees School
Kimberlie Ryals, Chief Operating Officer The September Trustee School was another success for the FPPTA. We’d like to thank all participants, sponsors, speakers, and staff for their hard work and commitment. The FPPTA continues to secure its place in the industry as the standard of trustee education. More than anything, this speaks to the seriousness of the commitment taken by Florida municipal trustees and the FPPTA membership. You should have received your membership package for 2011 in the mail. Anyone in your organization can login and renew membership through the FPPTA website. Completing the membership online is a quick and easy process that will ensure that your information is entered into our database and will appear online exactly as you wish. Also, it is very important that you provide and email address for each member on your contact list. Email addresses are used for communication purposes as well as logging into the website. If you have not yet activated your personal user account, please see the User Activation flyer in your membership package which provides detailed instructions on how to activate your account and login. We look forward to our January and February programs and hope to see you.
FPPTA 2011 MEMBERSHIP Please complete your 2011 membership renewal. Renewal is easy and can be completed on the FPPTA website in just a few minutes. Please visit the appropriate membership page below: Associate/Service Provider Pension Board Individual
Sincerely,
Retiree Program Kimberlie Ryals, Chief Operating Officer Florida Public Pension Trustee Association
New FPPTA Iniative: FPPTA Trustees’ Corner The FPPTA encourages our members to reach out to us in times of need. Does your board have an issue or question the FPPTA can help with? Please let us know. We’ll be introducing a new feature to the FPPTA E-Newsletter in which we answer questions from our membership. The FPPTA will reach out to the appropriate professionals to address your concerns and share that correspondence with the membership in the following edition of the E-Newsletter. This will help the FPPTA stay on top of the issues that matter most to our membership and also better prepare other members who might have a similar questions. Please send inquiries to ray@fppta.org
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Public Relations Susan Marden,
Public Relations Consultant
Faces of Florida… real people, real stories has developed into a project with great potential to counter balance negative perceptions of public employees. New material, new stories, and new faces have been added to the project. The new material will be posted on www.fppta.org this month. The FPPTA also has produced a sixty second public service announcement that will announce the program on the front page of the web site, as well as to news media, members, retirees and lawmakers. We continue to seek participants and especially would like to add more general employees to our real people stories. So how about it? We hope to hear from the water & sewer workers, town hall administrators who have served 30 years, or through six mayoral terms. How about the DPW crews? These people are a critical part of our larger story, and they make the world go ‘round for all those taxpayers who depend upon their services. Please visit the FPPTA web site, click on News & Information, then on Faces of Florida. Contact us to let us know your story, so we can educate the public and your employers about the need for strong public pension benefits.
Faces of Florida...real people, real stories
Jeffrey “Scott” Baynes Ft. Lauderdale Fire & Rescue
Renee Lipton Founding member, FPPTA
Raymond Edmondson, Jr. Carol Knapp Ft. Lauderdale PD, retired Ft. Lauderdale PD Dispatch, retired CEO, FPPTA
The FPPTA is gathering testimonials that portray the real-life experiences of Florida’s public employees. It is designed to reveal the real people behind the public discussion about public employee benefits, and to strengthen the case for defined benefit pensions. The campaign is called “Faces of Florida….real people, real stories”, and we plan to share it with legislators, the news media, elected officials and the public. The FPPTA will begin highlighting a new set of interviews in each edition of the E-newsletter. Faces of Florida: http://fppta.org/FOF/FOF.aspx
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News Clips Fred Nesbitt, Media Consultant Attack ads over state pension fund draw return fire in governor’s race By Jeff Ostrowski, Palm Beach Post, September 29, 2010 Florida’s pension fund has never missed a payment to a retiree, and independent analysts call it one of the strongest in the nation, yet the public pot of retirement money suddenly has emerged as a contentious issue in the governor’s race. The first shot came from the Republican Party of Florida, which last week ran an ad on behalf of candidate Rick Scott blasting his Democratic rival, Chief Financial Officer Alex Sink. The ad blamed Sink for billions in investment losses suffered by the pension fund as the stock market cratered. The $24 billion cited in the ad reflects the decreased value of the fund’s investments from July 1, 2008, through June 30, 2009, said fund spokesman Dennis MacKee. During that year, the Dow Jones Industrial Average fell by 26 percent, and the Standard & Poor’s 500 plunged 29 percent. Fla. investment chief says pension fund strong By Bill Kaczor, Bloomberg Business Week, September 29, 2010 Florida’s investment chief said the state retirement fund is one of the nation’s healthiest in a report Tuesday that contrasts with a Republican Party ad suggesting public employees’ pensions are in jeopardy. Board data shows the fund did decline when the financial markets hit the skids in 2008 and 2009. It has since regained most of its lost value, but is still below its $134 billion value of three years ago. Williams also denied Congress is investing the board. He said a request for information from the federal Financial Crisis Inquiry Commission is merely part of its search for the causes and effects of the worldwide financial meltdown. Fire contract vote key in Peyton’s push for citywide union concessions By Matt Galnor, Florida Times Union, September 19, 2010 Jacksonville, FL - Mayor John Peyton’s office will introduce a bill for the City Council to approve the contract as an emergency at the Sept. 28 council meeting. Firefighters receive a 2 percent pay cut that will be restored in 2012 and begin paying 5 percent of their personal health insurance premiums. The city guarantees there will be no layoffs until at least September 2011. That guarantee extends one more year if the Police and Fire Pension Fund agrees to pension reform The Police and Fire Pension Fund has agreed to study Peyton’s plan that would increase the years of service needed to retire.
The Diane Rehm Show: Public Pensions Federal, state and local budget deficits prompt a hard look at what some say are generous pensions promised to government workers: Pension plan problem and underfunded retirement in both the public and private sectors. http://thedianerehmshow.org/shows/2010-10-07/public-pension-plans
Guests:
Leigh Snell Federal Relations Director,the National Council on Teacher Retirement David John senior research fellow, The Heritage Foundation Norman Stein professor of law, Drexel University Tom Shoop editor in chief,Government Executive Magazine 5
Drawing a line on pension fund investment By Seth R. Nelson, Tampa Tribune, September 17, 2010 Two months ago, at the monthly meeting of the pension board, I asked the board to change its investment guidelines to mirror the Protecting Florida’s Investment Act of 2007. The act requires the State Board of Administration (SBA), the agency that oversees Florida’s investment of approximately $138 billion of state pension money, to divest from companies conducting prohibited business operations in Iran and Sudan. Although there was support from some Tampa pension board members to divest, the board’s investment consultant and some of the board’s international fund managers were not in support. Perhaps these fund managers believe that their only duty is to provide the best return on investment, but it’s time they realized that our national security matters more and also has the potential to have a major impact on return on investment. SBA’s efforts to rebuild trust meet with some skepticism By Sydney P. Freedberg, St Petersburg Times, September 19, 2010 Almost three years after cities, counties and school districts felt betrayed by the State Board of Administration, some don’t trust the state’s FRA money managers. Florida Prime, which three years ago was the country’s largest local investment pool with $31 billion, has dwindled to less than $6 billion. The number of communities and schools participating has fallen from 1,002 to 803; some are parking their extra cash in banks, other money markets or Treasury bills. The breach in trust came in 2007, when the SBA did not fully inform its clients that the local pool and other funds held about $2 billion of troubled, mortgage-related securities like those fueling the collapse of Wall Street. After anxious communities started withdrawing billions, the state froze the local fund. Miami Passes $499 Million Budget With Fees, Employee-Cost Cuts By Simone Baribeau, Miami Herald, September 28, 2010 Miami commissioners passed a $499 million general-fund budget for fiscal 2011 after closing a $115 million deficit with new fees and payroll and pension cuts. Miami imposed more than $75 million of wage, pension and healthcare cuts on police and firefighter unions on Aug. 31. The city, whose pensions will consume almost one-fifth of its budget this year, declared a state of “financial urgency” in April that allowed it to rewrite contracts with four unions without their agreement. Pension costs in fiscal 2011 will be reduced by about $43 million; salaries will fall $27 million, including more than $1.5 million less for non-union employees, and contributions toward health care will drop $7 million, according to the budget document provided by the city. Miami will spend almost 75 percent of its current $514 million budget on employee costs, including about 18 percent on pension contributions, according its annual budget book.
www.publicpensionsonline.com/fppta.html
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State Legislative Update Randy Touchton, State Legislative Consultant The upcoming 2011 Regular Session will present many threats to all of the public pension plans. That will include, the general employee plans (Chapter 112 F.S.), the Chapter 175 and 185 plans, and the Florida Retirement System (Chapter 121, F.S.). These threats or proposed changes will focus on benefits reductions, the administration of the local plans, and a transition toward defined contribution plans. I think we would all agree that most of the views regarding pension reform have been generated by what has been reported by the print media and/or the views of several organizations such as Florida Tax Watch or the Florida League of Cities. Probably the most recently active, is the Florida Tax Watch who have met twice to refine their recommendations for the upcoming session. Their total focus is on saving money and primarily relate to the Florida Retirement System. I know there are FPPTA members who feel we should concentrate on the local plan issues; however, I firmly believe that if the FRS is changed to a defined contribution plan, the local plans will soon follow.
Social Security Facts On October 15 the Social Security Administration is expected to announce that retirees and disabled Americans will see no increase in their benefits for 2011, the second straight year without an increase.
Breaking it down: Total beneficiaries: 58.7 million Social Security recipients: 53.5 million Supplemental Security Income recipients: 7.9 million People who get both Social Security and SSI: 2.7 million Average monthly Social Security payment: $1,072 Average montyhly SSI payment: $499
The FPPTA being an educational based organization, and non-political, is in a perfect position to utilize its’ membership and their pension plan knowledge to educate the members of the Florida Legislature and their local legislative bodies.
Social Security is the primary source of income for 64% of recipients
These FPPTA educational opportunities, however, would focus on the proper administration of the plans, insure that the fiduciary responsibilities of the board members are protected, protect the sustainability of the plans, and the correct the unfounded information relating to defined benefit plans. In terms of issues involving benefit reductions, I believe those discussions are better handled by the union organizations
Early retirement age: 62
There is a tremendous need for this education to occur and that need will manifest itself after the conclusion of the General Election on November 2nd.
-Source: Social Security Administration
One-third of recipients rely on Social Security for at least 90% of their income
Full retirement age: 66, rising to 67 for people born after 1959.
FLORIDA VOTER INFORMATION For information about voting in Florida for the November General Election please visit The Florida Division of Elections. The Florida Division of Elections
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Notes from Washington, D.C. Tom Lussier,
Federal Legislative Consultant
Lawmakers returned to Washington in September for the last stretch of Congress before mid-term elections that will determine control of the House and Senate. This year’s health care reform law is sure to play a role in many of those elections, and some events during the month could help to shape the debates. The Census Bureau announced that the number of uninsured Americans jumped nearly one-tenth to 50.7 million between 2008 and 2009, while the Kaiser Family Foundation released a report that found that employers are pushing more health care premium costs onto workers. Several insurance companies, meanwhile, indicated that they will have to raise rates significantly because of the requirements of the reform law. The Obama administration and Democratic members of Congress quickly challenged these claims and warned insurers against “falsely blaming premium increases for 2011 on the patient protections in the Affordable Care Act.” Republicans, though, questioned the administration’s projection that cost increases from the legislation will be minimal.
Finance Committee Chairman Max Baucus, D-Mont., and Senate Commerce Committee Chairman Jay Rockefeller, D-W.V., wrote that raising rates and blaming the reform law at a time when many insurers are reporting large profits “is irresponsible and unacceptable.” “If an insurer thinks it can blame the enactment of the Affordable Care Act for its rising premiums, it is surely mistaken,” Baucus and Rockefeller wrote. “This level of misinformation is not acceptable. … And if an insurer thinks it can continue to impose double-digit premium increases, while providing fewer health benefits and enjoying record surpluses, it is again mistaken. There have been too many reports of insurance companies imposing insurance premiums increases at will with little oversight or public accountability. We are committed to ensuring that premium increases are fair and justified.” They also noted that the U.S. Department of Health and Human Services (HHS) has estimated that the provisions of the reform law will result in premium increases of just 1-2 percent and stated that insurers who claim a higher percentage should explain why they are doing so.
Senate Committee Chairs Warn Insurers on Premium “Insurers should also account for the reasons why record Hikes industry profits and reserve levels have not resulted in lower premium increases,” they added. Two Senate committee chairmen wrote to the nation’s five largest insurers on Sept. 20 to warn them not to use the On Sept. 9, HHS Secretary Kathleen Sebelius wrote to mandates of the new health care reform law as an excuse the CEO of the trade group America’s Health Insurance to sharply increase premiums. Plans to object to insurers “sending letters to their enrollees falsely blaming premium increases for 2011 on the paAetna, some BlueCross BlueShield plans and others have tient protections in the Affordable Care Act” and to warn recently indicated that they will raise rates by as much of possible actions to be taken against those insurers. as 9 percent for holders of individual and small business policies because of the benefits and coverage require- Meanwhile, the ranking Republicans on the Finance ments included in the recently enacted “Patient Protection Committee and the Senate Health, Education, Labor and and Affordable Care Act.” The increases are in addition to Pensions Committee – Charles Grassley of Iowa and Mipremium hikes related to rising medical expenses, mean- chael Enzi of Wyoming, respectively – wrote to Sebelius ing total premiums could jump in some places by 20 per- on Tuesday to reiterate a request made on July 22 that she cent or more. explain the agency’s projections regarding the cost of the reform law’s provisions. In the letter to executives at WellPoint, United, Aetna, Health Care Services Corporation, and CIGNA, Senate 8
“This estimate that the new health care law will increase premiums by one to two percent is an admission that the new law not only violates the President’s promise that it would lower premiums by $2,500 per family per year, it also appears to underestimate what is occurring in the marketplace in response to the law,” Grassley and Enzi wrote. “Throughout the health care reform debate, supporters of the new law made countless promises about how it would bring down overall spending and lower health care costs for individuals, families and employers. Numerous studies, reports, and findings make it clear these promises will not be kept. If the Administration has evidence to the contrary, we urge that it be made publicly available.”
The CBO projected that, had no generics been dispensed, spending would have been about $93 billion, which would have been a 55 percent increase. About three-fourths of the $33 billion in savings accrued to the Medicare program, with the remainder going to beneficiaries, the CBO estimated. The CBO noted that generics are expected to become available for several high-priced drugs between now and 2012, and relatively few new brand-name drugs are close to reaching the market, which could mean additional savings of $12 billion in coming years.
‘Say-on-Pay’ Rules to Be Ready for Next Proxy Season, Number of Uninsured Americans Exceeds 50 Million, SEC Official Says Census Bureau Reports The Securities and Exchange Commission (SEC) hopes to The number of Americans who lack health insurance have “say-on-pay” rules in place within months, a commisjumped nearly one-tenth to 50.7 million in 2009, according sion official told members of Congress on Sept. 24. to a report released by the U.S. Census Bureau. The “Dodd-Frank Wall Street Reform and Consumer ProThe non-covered population increased 9.5 percent from the tection Act” that became law this summer requires that 2008 total of 46.3 million, the Bureau reported. In addition, shareholders be allowed to cast advisory votes on executhe number of Americans who have health insurance de- tive compensation packages. CalPERS has advocated for creased for the first time since 1987, the first year in which adoption of this measure for several years. comparable data were collected, dropping from 255.1 million to 253.6 million. This pushed the percentage of Ameri- “Although the Dodd-Frank Act does not specify a deadcans without coverage up to 16.7 percent. line for rulemaking, the commission’s goal is to adopt final Analysts generally point to the recession as a primary rea- rules in time to inform the 2011 proxy season,” Meredith son for the worsening numbers. The report noted that the Cross, director of the SEC’s Division of Corporation Fipercentage of people who have coverage through their em- nance, said at a House Financials Services Committee hearployer dropped to 55.8 percent, the lowest rate on record. ing on executive compensation oversight. Generic Drugs Saved Medicare, Beneficiaries $33 Bil- The SEC, Cross said, also expects to release rules within a lion in 2007: CBO year on the law’s requirements that: The use of generic drugs saved Medicare and its benefi- • Corporate compensation committees include only ciaries $33 billion in 2007, according to a report from the independent directors. Congressional Budget Office (CBO). • Companies disclose information about executive compensation and the relationship between the compenTotal drug spending in Medicare Part D in 2007 was about sation paid to executives and the firm’s financial perfor$60 billion. Of the roughly 1 billion prescriptions filled, mance. 65 percent were for generic drugs. Because of their lower • Registered broker-dealers, investment advisers and costs, though, generics accounted for only 25 percent of certain other financial institutions disclose information total spending. about incentive-based compensation packages and not put in place incentives that, according to regulators, would encourage inappropriate risks.
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Stuckey recommended that the SEC release its proposed “say-on-pay” rules by October so that they can be adopted in January. This timeline is necessary, she said, if companies are to incorporate the rules into their executive compensation disclosures and proxy statements, which will be developed soon and mailed in February or March.
ally decreased their reliance on conservative asset classes such as government bonds and increased the share of assets committed to higher-risk investments, such as stocks.
“While plan officials used such practices and strategies partly in pursuit of higher returns, they also viewed them as providing diversification and following well-accepted techniques of portfolio management in an effort to mitiStuckey also urged that the SEC give companies flexibility gate risk, given their long investment horizon,” the report in the disclosure of pay-versus-performance information. stated. “As there is a range of views about what type of depiction would tell the entire story, the SEC should allow those The GAO said that plan officials who had been interviewed views to play out and not dictate one single method for did not report making any major changes to their investcompanies to use when attempting in good faith to tell the ment strategies as a result of the recent fiscal crisis, though full story,” she said. several were reviewing those strategies and “many do anticipate some changes will be made.” She also said that corporate boards should be allowed to exercise discretion when carrying out the law’s require- The GAO did not offer any recommendations, but it conment that they establish policies for the “clawback” of ex- cluded that while state and local pension plans “appear to ecutive compensation awarded on the basis of false finan- have the assets needed to pay current benefits, their longcial information. term prospects bear continued monitoring and vigilance.” “The board should be given the same amount of discretion in recouping awards as was used in the original grant of an award,” she said. “In addition, the board must be allowed to determine if recoupment would cost more than the expected recovery amount is worth – and that is whether it would have to pursue litigation to recoup, the likelihood of recovery and any violation of existing contract or state law prohibitions. It would be perverse to require a clawback in every instance even where the recovery would result in a higher cost to recover than is the amount being recouped.”
“Though already difficult, the challenge of making the necessary contributions and affording guaranteed benefits can be expected to become even more so – especially for those state and local governments whose fiscal position continues to erode – and, as a result, many governments are being forced to make difficult choices,” the report stated. “State and local plans appear to have moved toward investing in higher-risk assets with the goal of achieving a balanced, diversified portfolio that seeks higher returns and manages risk over the long term.
GAO Reviews Public Pensions
As plans look to diversify their investment risk through the increasing use of alternative investments, they could expose plan assets to new types of risk. If state and local pension plans and their sponsors are unable to properly monitor and manage these new risks, they may exacerbate recent market losses, which could result in increased employer contributions – costs that many governments are unable to afford.”
Nearly four out of every five medium-to-large public pension plans surveyed by the Government Accountability Office (GAO) lost 20 percent or more of its assets during the second half of 2008, according to a report released on Sept. 20. The report, which was produced at the request of Sen. Charles Grassley of Iowa, the ranking Republican on the Senate Finance Committee, begins with a lengthy overview of the governance of state and local pension systems. It then notes that, among medium and large plans, 68 percent of assets are invested in equities with 30 percent in bonds and the remainder in cash and other assets. In recent decades, the GAO found, public pension funds have gradu-
GAO Counts $3.5 Billion in Public Funds’ Sudan Divestitures Managers of state pensions and other state investment funds have divested or frozen about $3.5 billion in Sudanrelated assets since 2006, according to a report released on Sept. 20 by the Government Accountability Office (GAO).
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The actions were generally directed by state laws and policies put in place because of gross human rights violations and genocide in Sudan’s Darfur region and the designation of Sudan by the U.S. government as a state sponsor of terrorism. Congress in 2007 passed the “Sudan Accountability and Divestment Act” to authorize public pension funds and investment companies to divest from companies doing business in Sudan.
– “in order to enhance the investing public’s access to information it needs to make well-informed decisions when determining whether and how to divest Sudan-related assets.” The director of the SEC’s Division of Corporation Finance said the department would present the recommendation to the commission but cautioned that the adoption of disclosure requirements that are not guided by materiality concerns could be counterproductive since “the volume of information could overwhelm investors and could posNew Jersey accounted for $2.2 billion of the total amount sibly obscure other material information.” divested or frozen. California was found to have divested or frozen $81.7 million between May 2006 and September Obama Appoints Consumer Protection Bureau Advisor 2008. President Obama on Sept. 17 named a leading consumer advocate to oversee the development of the federal govU.S.-based investment companies have also significantly ernment’s agency to regulate mortgages, credit cards and decreased their holdings in companies connected to Sudan, other consumer financial products. the GAO found. Harvard law professor Elizabeth Warren, who is credited “We determined that, from March 2007 to December 2009, with being one of the earliest proponents of a consumer the total value of U.S. shares invested in six key foreign agency, will guide all aspects of the establishment of the companies with Sudan-related business operations de- Consumer Financial Protection Bureau, the creation of clined by almost 60 percent,” the report stated. “This de- which was one of the major provisions of the financial recline cannot be accounted for solely by a reduction in stock form legislation that became law this summer. prices for these companies, indicating that U.S. investors, on net, decided to sell shares in these companies.” “The Consumer Financial Protection Bureau will be a watchdog for the American consumer, charged with enInvestment companies reported that the buying and selling forcing the toughest financial protections in history,” of the companies was done “for normal business reasons, Obama said. such as maximizing shareholder value consistent with the guidelines in each fund’s prospectus, as well as in response Referring to Warren as “one of the country’s fiercest advoto specific client instructions.” cates for the middle class,” he said that he is “very grateful The report identified three factors used to determine when that Elizabeth has agreed to serve in this important role of and how to divest from Sudan: getting the Consumer Financial Bureau up and running and making it as effective as possible.” • Consistency with fiduciary responsibility (17 state fund managers reported having significant concerns that Warren wrote on the White House website on Sept. 17 that “it would be difficult to divest while ensuring that fiduciary the agency “is based on a pretty simple idea: people ought trust requirements were not breached and my office/state to be able to read their credit card and mortgage contracts was not made vulnerable to law suits.”) and know the deal.” • Difficulty in obtaining reliable information about whether companies have Sudan-related operations. “They shouldn’t learn about an unfair rule or practice only • Concerns about driving socially responsible com- when it bites them – way too late for them to do anything panies out of Sudan, creating business opportunities for about it,” she wrote. “The new law creates a chance to put less conscientious companies. a tough cop on the beat and provide real accountability and oversight of the consumer credit market. The time for hidThe GAO recommended that the Securities and Exchange ing tricks and traps in the fine print is over. This new buCommission (SEC) consider requiring companies to dis- reau is based on the simple idea that if the playing field is close their business operations related to Sudan – and pos- level and families can see what’s going on, they will have sibly other U.S.-designated state sponsors of terrorism better tools to make better choices.” 11
The selection of Warren was lauded by consumer advocates and many Democrats, with House Financial Services Committee Chairman Barney Frank, D-Mass., one of the architects of the financial reform bill, calling it a “great appointment” and saying that “nothing could be better news for [American consumers] in terms of being protected in financial matters like home mortgages, bank accounts and credit cards.”
has resulted in the confirmation process having “virtually ground to a halt.” “Nobody was going to be confirmed anytime soon,” he said. The administration hopes to have the consumer agency operating by July 21, 2011.
But Republicans and business interests, who have, for the most part, opposed the agency since it was first proposed, were generally critical, with many arguing that Warren is hostile to business. “She represents a view, which is a view represented in the financial regulatory bill, that makes credit harder to get on Main Street, that imposes Washington decisions on local banking issues and that would put her and the agency in charge of making millions of decisions that ought to be made by the free market or by community banks,” Sen. Lamar Alexander, R-Tenn., said. What appeared to most disturb Republicans was that Obama appointed Warren not to be the director of the agency – which would have required Senate confirmation – but, instead, to serve in the dual roles of assistant to the president and special advisor to the secretary of the Treasury on the Consumer Financial Protection Bureau. As a result, Warren will not be subject to Senate review. Reps. Darrell Issa, R-Calif., and Spencer Bachus, R-Ala., wrote in a Sept. 17 letter to Counsel to the President Robert Bauer that “by giving Professor Warren responsibilities at both the White House and Treasury Department, [Obama] is undermining Congressional oversight while giving her substantive authority over the CFPB. This is unprecedented.” “To better understand how Professor Warren’s appointment will accommodate the need for legitimate oversight of the CFPB, we ask that you disclose her specific responsibilities and supervisory authority, which agency will pay her salary, and where she will file her mandatory financial disclosure statement,” they wrote. “We also ask that the White House pledge to make Professor Warren available for testimony before all relevant Congressional committees.” Issa is the ranking Republican on the House Oversight and Government Reform Committee, and Bachus is the ranking Republican on the House Financial Services Committee. When asked about the method of appointment, presidential spokesman Robert Gibbs noted that nearly 200 nominations are pending before the Senate and said that partisanship 12
Board of Directors
Pete Prior, CPPT Chairman
Steve Aspinall, CPPT Treasurer
Joe Liguori, CPPT Director
George Farrell, CPPT Vice Chairman
Brenda Clanton, CPPT Director
Renee Lipton, CPPT Director Emeritus
Ann Thompson, CPPT Secretary
Gary Clark, CPPT Director
Ken Harrison, CPPT Director Emeritus
FPPTA Staff
Ray Edmondson , CPPT Chief Executive Officer ray@fppta.org
Kim Ryals , CPPT Chief Operating Officer CPPT Coordinator kim@fppta.org
Lois Edmondson Senior Executive Assistant Membership and Event Registration Specialist Lois@fppta.org
Peter Hapgood , CPPT Education Consultant Peterhapgood@fppta.org
Fred Nesbitt, PhD FPPTA Media Consultant fnesbitt911@gmail.com
Susan Marden Public Relations Consultant smard2@verizon.net
Tom Lussier Federal Legislative Consultant tlussier@lgva.net
Randy Touchton State Legislative Consultant randyt@nettally.com
FPPTA Education Committee Peter Hapgood, CPPT, Chairperson FPPTA Education Consultant
Joe Liguori, CPPT, Director Delray Beach Police & Fire Pension Fund
Tim Olsen, CPPT Melbourne Fire Pension Fund
Ray Edmondson, CPPT FPPTA Chief Executive Officer
Ann Thompson, CPPT, Board Secretary Vero Beach Police Pension Fund
Mike Spencer, CPPT RBC Global Asset Management
Kimberlie E. Ryals, CPPT FPPTA Chief Operating Officer
Dennis Hole, CPPT Ft. Lauderdale Police & Fire Pension Fund
Jack Farland, CPPT Public Pensions, Inc.
Pete Prior, CPPT, Chairperson Hialeah Gardens Police Pension Fund
Steve Corbet, CPPT St. Petersburg Police Pension Fund
Grant McMurry, CPPT ICC Capital Management
Steve Aspinall, CPPT, Board Treasurer St. Petersburg Police Officers Pension Fund
Richard Grover, CPPT Pensacola Firefighters Pension Fund
Katie Byrne, CPPT DePrince, Race & Zollo
FPPTA Advisory Board Howard Bos, CPPT, Chairperson Richmond Capital Management
Grant McMurry, CPPT ICC Capital Management
Mary McTague Atlanta Capital Management
W.O. Bell, Vice-Chairperson Westwood Distributors
Tracy Musser Thompson, Siegel & Walmsley, Inc.
Chris Greco Sawgrass Asset Management
Brad Rinsem, Secretary Salem Trust
Joe White Saxena White, PA
Bob Podgorny Dow Jones Indexes
Michael Spencer, CPPT RBC Global Asset Management
Katie Byrne, CPPT DePrince, Race & Zollo
Tom Franzese Lazard Asset Management
Bruce Feiner, CPPT ConvergEx Group
Tom Capobianco Lee Munder Capital
Richelle Hayes, CPPT American Realty Advisors
Janna Hamilton, CPPT Garcia Hamilton & Associates
Chad Little Freiman Little Actuaries
Alison Bieler Cypen & Cypen
Joe Bogdahn The Bogdahn Group
Jerry Navarette The Boston Company
Allison Corbally State Street Global Advisors
Michael Smith JP Morgan
FPPTA
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