# CAFRs

Comprehensive Annual Financial Reports

ARCHIVED AT - http://CAFR1.com/1trillion.html

Government says their Pensions are 1 trillion Short?

Well, looks like it may be time for an education lesson!

by Walter Burien - CAFR1.com

02/21/10

If you said you were \$40 short on your monthly food budget, what is the first question that comes to mind?

ANS: What is your monthly food budget..

If your food budget was \$400 you are short 10%, if \$80 then you are short 50%.. Big difference between the two.

This media "promotion" of  1 trillion dollars short has two big pieces of the picture intentionally omitted.

1. What is the "collective" totals under management that they say they are 1 trillion dollars short on?

2. What is the actuarial projection being used whereby they say they are 1 trillion dollars short?

EXAMPLE:  If you wanted \$100,000 a year at retirement, how much money do you need  to put to the side that pays you \$100,000 of investment return twenty years from now?

The key factor here is the projected rate of return you anticipate getting from your fund balance. Lets say we use an actuarial projection of a 10% rate of return. That means we must have \$1,000,000 (1 million dollars) put aside and at a 10% annual return  that gives us our \$100,000 a year. But if we projected getting a 5% rate of return that would now make the figure \$2,000,000 (2 million dollars). Let's take it one step further. Let's use an actuarial projection of 2.5%, that means we would need \$4,000,000 (4 million dollars)

Well, there is a big difference between 1 million dollars and 4 million dollars.

So, under the example above if we at the start used a projection of a 2.5% rate-of-return, had built our balance up  with contributions and investment return over ten years to \$2,000,000 (2 million dollars) we would be 50% short on our "projected" need to meet our retirement using a 2.5% projected rate of return.

Well here's the kicker.. if "in reality" we were getting a 10% rate of return and adjusted  our  "actuarial projection" accordingly, we would be 100% over funded.....  Get it??? Only \$1,000,000 (1 million dollars) needed.

So the ONLY issue when government says they are 1 trillion dollars short is: What are the actuarial projections being used  vs . THE REAL RATE of return being accomplished combined with their standing fund balance?

It is VERY important to look at 1, 3, 5, 10, 15, 20 years of performance results to establish a correct actuarial projection that should be used per "projected" rate of return. Keep in mind the local governments own those funds NOT the employees. The employees bought a ticket to ride under contract. They get a set amount at retirement not a penny more. If performance on the fund  was up by two or three times what was needed the employees do not get 1c extra, they just have their ticket to ride under specific terms from point "A" to point "B".

The actuarial projections used by the local governments are designed to build up a "power base" for those local governments.  With hundreds of billions of dollars under management in each state that is a lot of grease to grease the skids for Corporate acquisitions; real-estate development; massive loans granted; and bond offerings backed. Here the incentive for the local governments is to fudge the actuarial projections used to build up a much bigger power base. Additionally in doing so they  give the impression of being short and thus get more money from the employee and take more tax revenue from the public...

On the State level their are many different local government retirement funds. Usually there will be one State retirement fund (usually the largest) and many other local government retirement funds. They are separate from each other but many network together under specialty "private" associations that in consult direct them all as a monopoly of no equal.

As an example from one state New Jersey, here are a few of the primary State funds that are active or closed but still under management. Many local governments from within the state may or may not be participating in these State funds. Other local governments in the state may be managing their own on the local level. When a local government says they are short, again look closely at the actuarial projections used vs. the real rate of returns accomplished over several years. As a rule government employees are just told the actuarial projection used, they are NOT told the real rate of return accomplished... The employees may be told 7% when 16% or 18% may be the reality... as was the case in Washington, Oregon, and Arizona from 1990 to 1999.

New Jersey

Alternate Benefit Program ("ABP") <http://www.state.nj.us/treasury/pensions/abp1.shtml>

Alternate Contribution Tax Sheltered Program ("ACTS") <http://www.state.nj.us/treasury/pensions/acts.shtml>

Central Pension Fund ("CPF") <http://www.state.nj.us/treasury/pensions/closed.shtml#CPF>

Consolidated Police and Firemen's Pension Fund ("CPFPF") <http://www.state.nj.us/treasury/pensions/closed.shtml#CPFPF>

Judicial Retirement System ("JRS") <http://www.state.nj.us/treasury/pensions/jrs1.shtml>

New Jersey Treasury, Division of Pension & Benefit <http://www.state.nj.us/treasury/pensions/>

Police and Firemen's Retirement System ("PFRS") <http://www.state.nj.us/treasury/pensions/pfrs1.shtml>

Prison Officers' Pension Fund ("POPF") <http://www.state.nj.us/treasury/pensions/closed.shtml#POPF>

Public Employees' Retirement System ("PERS") <http://www.state.nj.us/treasury/pensions/pers1.shtml>

State Employees' Deferred Compensation Plan ("NJSEDCP") <http://www.state.nj.us/treasury/pensions/fact32.htm>

State Employees' Tax Savings Program ("Tax \$ave") <http://www.state.nj.us/treasury/pensions/taxsave.shtml>

State Police Retirement System ("SPRS") <http://www.state.nj.us/treasury/pensions/sprs1.shtml>

Supplemental Annuity Collective Trust ("SACT") <http://www.state.nj.us/treasury/pensions/fact35.htm>

Teachers' Pension and Annuity Fund ("TPAF") <http://www.state.nj.us/treasury/pensions/tpaf1.shtml>

Collective totals are massive. Most of the large State pension funds put out a CAFR (Comprehensive Annual Financial Report) for each of their pension funds listing the extensive holdings / investments of each fund.

And per issue #1 above, collective totals from all local and federal pension / retirement funds from the thousands of "separate" accounts, a good estimate of collective totals would be somewhere between 26 to 30 trillion dollars.

I note as these funds grew and were invested over the last eight decades they drove the economy by their capital investment. Did favoritism; fraud; and market manipulations occur as these funds grew? Oh yes, and some examples came to light (very few) and most went in and out with the tide as normal operations masked.

Bottom line?  LOOK AND LEARN....,

Do not be played for an easy mark (this applies to both taxpayers AND government employees) The only way to see if you are getting played with false actuarial projections applied is to look first hand and see for yourself. You do NOT ask foxes if they are eating hens from the hen house. The only time you may get a straight answer there is if you are a fox yourself and are part of the pack.

I hope the above also gives you a better understanding of what the site TaxRetirement.com brought forward per the TRF (Tax Retirement Funds). Here the same type of massive investment funds can build with the sole objective being to phase out all taxation generated therefrom. Not lowering taxation but eliminating it.

This can be done utilizing the exact same fund managers currently handling government pensions to accomplish the purpose of tax elimination. If you catch the gist of this can you see how through capital reinvestments coming from the TRFs we then can have a long term"economic stimulus package" of no equal and no taxation? In fact government pensions can be included in with the TRFs and benefits paid therefrom... as well as eliminating all taxation..

Time for a "real" change..? Hopefully you get it and comprehend how this can happen..

The government syndicate needs to be brought under control and have a means of operation that directly benefits the people from the wealth amassed.  The principle of operation of the TRFs does just that and allows for transparency and true good intent to come to play..

Truly yours,

Walter Burien - CAFR1.com

P. O. Box 2112

Saint Johns, AZ 85936

Tel. (928) 445-3532

PS: Make the investment wealth of government directly benefit the people and taxation be gone! TRF now!

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Any local government can be restructured to meet their annual budget needs "Without" taxes. TRF (Tax Retirement Funds <http://taxretirement.com/> ) paying for every City, County, State’s annual budgetary needs!

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CAFRs Comprehensive Annual Financial Reports (CAFR), state government
http://www.financenet.gov/financenet/state/cafr.htm#index

Texas State 1997 CAFR - It lists under the "local Government Investment
Pool" \$5.5 Trillion.

California State CAFR 1997, lists total investment assets of about \$3
trillion "BUT" in the notes it will direct you for the complete accounting
to the "Legal Basis Comprehensive Report" showing \$12 trillion under
management.

Just so we don't miss the most basic point here, composite government has
amassed in total liquid assets, \$60 trillion dollars plus.  The total net
worth of the private sector is \$25 trillion.

There are 10,000 cell operations that make up the whole.  The principle of
operation is: Through trickle down economics, just enough revenue is
released to the public to keep the chipmunk running on the treadmill
chasing the carrot, as they, the composite government boys, tap off 80% of
the energy from the treadmill, thus keeping the public working at optimum
efficiency.  Why do you think Gorbachev went democratic?

Composite Government funds ( this is our tax money, folks ) , listed as
institutional fund, own 71% of Xerox Corp.,  41% of AT&T, 57% of Motorola,
etc.

Insurance company equity participation, (mandated federal law 1968 enacted
1978 fully in effect, for 1/3 of the value of the insurance policy, to be
on deposit and held by the insurance industry as a major catastrophe fund:
New Jersey State 1998 CAFR is \$34 Billion dollars, California is \$1.2
trillion dollars, Federal is \$3.6 trillion.  The revenue in the catastrophe
fund, 86-90% is provided by composite government investment funds.  That's
about \$8 trillion.  Do you know what the annual interest income is on \$8
trillion at 4 to 5%?  Undisclosed tax through enactment of law on the
insurance industry for the creation of the fund, where they, composite
government, provided the revenue to meet the revenue requirements.  Ever
wonder why auto insurance rates are so high and payment is enforced by
armed force?  Well, lets see, Arizona, minimum coverage is \$30,000 1/3 =
\$10,000, 5% annual interest on \$10,000 = \$500.  Typical insurance is \$658
per year - \$500 = \$158 to the insurance company.

STOP LOOKING AT THE LEAVES ON THE BRANCHES OF THE TREES OF THE
FOREST...  Look at THE FOREST...
Composite totals show the clear and unequivocal financial take over of the
wealth of this country from the people.

Composite government pension funds = \$28 trillion.  The entire private
sector will never realize that amount.  Get the point?

Bottom Line- OPEN DISCLOSURE TO THE PUBLIC OF COMPOSITE TOTALS First step:
The CAFR has been hushed through cooperative nondisclosure to the
public.  Immediate disclosure OF THE NAME of the report to the public is
paramount.  As of 1998 large sums of revenue, fiduciary and trust funds,
are not listed and are accounted for in other documentation noted in the
CAFR.  Prior year reports 1997-1975 are imperative to be looked at when
following the money trail.

The NAME OF THE GAME is composite totals which shows the degree of the
financial takeover.  Government has turned into a virus and the public is
the host for that virus.  The problem is that the virus is now
substantially bigger than the host..

Please get the word out today so that the public can see the forest
for the first time.

Special thanks to:

Walter J.  Burien, Jr.

PO Box 11444
Prescott, Arizona 86304
phone:520-445-3532
email: [email protected]