BUZ LIVINGSTON: SWFD pension in good shape … April Fools

Published: Sunday, March 31, 2013 at 11:22 AM.

Averaging the last three years, SWFD chalked up a 6.87 percent return, 14 percent lower than our expected return.  

As logical as it seems to use a reasonable expected future return, no constituency wants change. An inflated return allows firefighters to continue the charade their plan is solvent while a realistic projected return means higher taxes, a policy staunchly opposed by the Walton County Taxpayers Association.

It’s ironic, dontcha think, to see the monetary stalwarts of the Walton County Taxpayers Association less fiscally conservative than liberal Californians. The firefighter union controls the pension board; if they continue their present policies, only bad choices will be available in the future.   

Currently we over-project returns and potentially underestimate costs. While not an issue since the plan has a solitary beneficiary, as more retire cue Deep Purple’s Smoke on the Water “Some stupid with a flare gun burned the place to the ground.”

I have no antipathy toward defined benefit plans but they necessitate prudent funding, realistic assumptions and sound investment practices. In the wake of an economy on the mend and new highs on the Dow, the pension plan remains underfunded.

Buz Livingston, CFP offers hourly financial planning and fee-only investment management to clients along Florida’s Emerald Coast.  Contact him at 267-1068, Buz@LivingstonFinancial.netor www.LivingstonFinancial.net.


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