Read “Your Pension News”
by Lou Walter, retired employee, member of the Seattle City Employees’ Retirement System
“Coronavirus pandemic impacts at SCERS”
In the latest May/June issue of ARSCE News, available here.
A message from the Seattle City Employees’ Retirement System (SCERS)
Update on the SCERS Investment Portfolio
Rev. Mar. 24, 2020
We would like to take the opportunity to provide a brief update on the SCERS investment portfolio given recent market volatility.
Over the last few weeks, the capital markets have reacted with growing concern to Covid-19, as it has spread beyond a limited set of countries and is likely to inflict widespread economic damage. Stock markets across the globe have experienced rapid and significant losses. Interest rates have fallen substantially, and the Federal Reserve has taken significant action to help shore up the economy. The consensus expectation is for a deep recession lasting through the middle of 2020.
For our members, there are a few key things we would like to emphasize. The first, and probably the most important, is that this will not impact retiree benefits. SCERS has a welldiversified investment portfolio with sufficient funds to ensure all pension obligations are met and all expenses are paid. SCERS is a long-term investor and, while this downturn is severe, we expect investments will fluctuate over the short-term. In fact, just last year the value of our investment portfolio increased by over 17%.
Our team of investment professionals and expert advisors are constantly monitoring this situation and will make any adjustments to the portfolio that are necessary.
You can review the original document here on the SCERS website.
You can also contact SCERS directly.
Seattle Times reports on Seattle City Employees’ Retirement System (SCERS) – 2018
The Seattle Times published a comprehensive report on the history and current status of SCERS on May 11, 2018, available here.
Former City Councilmember and Mayor Tim Burgess responded to the Seattle Times article on May 12, with this Facebook post.
A follow-up question-and-answer column was published May 16, available here.
SCERS issued a response to the Seattle Times article, available on its website.
ARSCE President John Masterjohn’s response to the Seattle Times article:
As you know, the Seattle Times newspaper published an article on the Seattle City Employees’ Retirement System (SCERS); I’m not sure why most of the paper’s focus took place 10 years ago or longer.
Make sure you read the article carefully, because all of the problems were prior to the current administration. If you read the response from Jeff Davis, the current Executive Director, you can see all the changes that were made since 2013 when Ken Nakatsu was appointed as the Executive Director. As the article states, when Ken came on board, the unfunded liability was around 52% and now it is at 71%. Jeff Davis and his staff have carried on where Ken left off, and they have done a great job; Jeff and Jason (Malinowski) were both on Ken’s staff.
You also can read former Mayor Tim Burgess’ response to the article on ARSCE’s Facebook page.
The main headline in the Seattle Times article was “Taxpayers Foot Bill for Fumbles in City Pension.” It goes on to say that City officials struck deals with City Unions to cap the employees’ contributions at 10%, but that the City also received some things they wanted in return. Also in the 1990s, some of the improvements included raising the floor on prior retirees to 60% of the cost of living and adding a yearly 1.5% COLA (Cost of Living Adjustment) which was below the cost of living increase on a number of those years.
So remember, the people who were in charge of the system prior to June of 2013 were the ones who got the program into trouble. The changes that have been made since then have brought the system back to respectability.
As Jeff said in his answer to the Seattle Times, if you have questions just call the Retirement office. Well, I will close for now so this can get into our Facebook page and on our new website for your review.
(This statement appeared as the President’s Message in the July/August 2018 ARSCE News, p. 1).