Connect with us

News

Is it Time to Make Changes at RSA?

Brandon Moseley

Published

on

By Brandon Moseley
Alabama Political Reporter

Investing money can be difficult. Investors need to diligently research individual stocks, bonds, stock mutual funds, bond mutual funds, commodity funds, managed money accounts, exchange traded funds (ETFs), real estate investment trusts (REITs), hedge funds, etc. before making decisions about what to buy more of and what to sell and when. Opinions often vary wildly on how to pick investment vehicles but there is one principle that virtually all professional investors agree on and that is periodically you have to review investment performance. In December Morningstar released a report on state pension funds showing what most of us already knew. The Retirement Systems of Alabama (RSA) has underperformed at managing assets over the last decade.

According to Morning Star, in 2007 the RSA had total assets of $30.7 billion and pension liabilities of $38.7 billion. In 2008 assets climbed to almost $31 billion, but liabilities for state pensions climbed to $40.2 billion. In 2009 RSA’s assets dropped to $30.8 billion and liabilities climbed to $41.6 billion. In 2010 assets dropped to $30.1 billion but liabilities increased to $42.9 billion. Recognizing the problem, the state legislature increased the employees’ contributions to their own retirements (effectively lowering their take home pay.) Despite this reform, in 2011 RSA assets dropped to $29.1 billion while liabilities increased to $43.5 billion. The spread between assets and liabilities has grown from $8 billion in 2007 to $14.4 billion in 2011. In investing, facts are quantifiable. You either made money or you didn’t. Your mutual fund outperformed other mutual funds or it didn’t. According to independent analysis the RSA is one of the worst performing state pension funds in the country. The RSA is managed by Dr. David Bronner who has headed the fund since 1973. His previous employment was as a law professor at the University of Alabama.

‘The Alabama Political Reporter’ talked with state Representative Jim McClendon (R) from Springville about the situation on Thursday. McClendon said that you needed to look at the big picture McClendon said that you can’t compare current rates of returns versus their past rates of return. You have to compare the returns against the returns versus other pension funds in recent years the board has underperformed versus other pension funds. “This tells me that they could use financial advisers who have actual experience at managing money and a proven track record of success at managing money over time.” McClendon said that the poor performance is an indicator that the board is composed of people who do not understand or have experience in successfully managing money.

Alabama Education Association Executive Secretary Henry Mabry wrote in Monday’s ‘Alabama School Journal’, “TRS has a serious problem that needs to be addressed. In the last five years, the state and TRS (Teacher’s Retirement Systems – one of three pension plans run by RSA) members contributed $5.4 billion and benefits paid out were $8.1 billion. Investment income should have made up the difference but it did not. TRS actually lost $21.5 million in investment income instead of making up the $2.7 billion shortfall between contributions coming in and benefits going out. Last year, for instance, the state and employees contributed almost $1.1 billion, but costs were $1.9 billion. TRS assets are $2.6 billion lower than just over five years ago, or 12 percent down. This means benefits have been paid with savings for the future. Investments must improve or our members’ retirements are in jeopardy or out-of-pocket and state increases will rise, or both.”

Alabama State Senator Cam Ward (R) from Alabaster agreed in comments on Facebook on Thursday, “For several years in a row I have spoken with educators regarding my concern with the return on state pensions and how it was harming the state Education Trust Fund Budget. I caught a lot of heat for my comments. I have been concerned that the poor return which has led to the legislature having to spend more and more money to shore up the pension plan, could have been used instead to fund classrooms with supplies and other materials. I am glad to see the education community agree with me on that assessment in this article. For every dollar that RSA asks from the legislature to shore up sagging pension returns, is a dollar less for copy paper, school supplies and teaching materials.”

Rep. McClendon said, “We do know that Bronner dominates that board.” “The logical thing is to alter the composition of that board.” “AEA has reversed their position on RSA. I told them three years ago that changes need to be made.” McClendon said that the board needs to be composed of people with the appropriate knowledge to understand how to invest the money that the state and the state employees are giving them and who have a track record of successfully managing money. McClendon said however that to his knowledge nobody is introducing legislation to reform RSA in this session.

Advertisement

Mabry wrote, “The facts point to losses caused by alternative investments such as real estate. Over the past five years, almost $700 million has gone down a rat hole thanks to these “investments.” To put it in perspective, $700 million is more than twice what is spent on school transportation for the whole state or over 12,000 teacher units for a year. Economic development of the state is great and wonderful, but economic development at the expense of active and retired TRS members does not pass muster. It is their money and not to be used for someone’s monopoly game.”

Rep. Kurt Wallace (R) from Maplesville said on Facebook, “Since I have been elected I have had to take numerous beatings from AEA. Mostly because we (the legislature) said their TRS investments were one of the worst in the nation (based on several independent audits). They called us liars and thieves. As we were shelling out hundreds of millions of tax payer dollars to prop up their retirement system, they were constantly trashing us. Now, hear it from the ring leader Henry Mabry himself. I love my teachers and it’s good to finally here their leader say exactly what we’ve been saying all along. Now…maybe we can work together to fix a broken system.”

Sen. Ward said in December, “The solution I would offer is to restrict the investments of the RSA Board. Right now they invest a great deal in golf courses, hotels, airlines and other ventures that are very risky but in the name of promoting local tourism. The role of all pension managers around the country is to make sure the pension plan is solvent and has good returns for their retirees, not promoting tourism. Alabama has a Tourism Director so we don’t need the RSA Board doing that job as well. Their job is to invest in areas that will make a return for their retirees.”

Advertisement
Advertisement

Mabry wrote, “TRS is requesting almost $100 million more for next year. And next year they will be requesting another $100 million on top of that amount for the following year and the year after that will be no different. We have no choice but to get such amounts funded. If investment returns had not been so abysmal, then these multiple $100 million infusions of cash into the Retirement Systems could by providing much needed funding for textbooks, supplies, technology, professional development, PEEHIP cost increases, or additional pay every year.”

Advertisement

Aerospace and Defense

Jones criticized for voting to limit Trump’s war powers authority

Brandon Moseley

Published

on

Thursday, U.S. Senator Doug Jones (D-Alabama) voted in favor of S.J.Res.68, a resolution which directs the removal of United States military from hostilities against the Islamic Republic of Iran that have not been authorized by Congress. Jones has been criticized by Republicans for voting to limit President Donald J. Trump’s war powers on Iran.

“Before a President can lead us into war, he or she must first earn the support of the American people and also fulfill their solemn constitutional obligation to seek approval from Congress,” Sen. Jones said in a statement. “While the President has the power to protect Americans in the case of an imminent attack, that authority does not extend to committing our service members to long-term hostilities unilaterally. This resolution sends a strong message that we will follow the Constitution and we will not send our troops into harm’s way without the serious consideration and consent of the Congress.”

Trump Victory National Finance Committee member Perry O. Hooper Jr. released a statement in response.

“Senator Jones once again turned his back on Alabama and voted as the leftwing Democrats commanded. He has no regard for the values, opinions or views of Alabamians,” Hooper said. “He sees us as deplorables just like the elites of the Democratic party who have funded 80 percent of his doomed campaign for re-election.:

Hooper stated, “I whole heartily support the President who stated ‘We are doing very well with Iran and this is not the time to show weakness… If my hands were tied, Iran would have a field day. Sends a very bad signal. The Democrats are only doing this as an attempt to embarrass the Republican Party.’”

“The Commander-in-chief must be free to work with his staff and his military leaders to conduct covert operations like the one that eliminated Iran’s terrorist-in-chief General Soleimani,” Hooper added. “You can’t micromanage the war on terrorism. The Democrats in Congress are so filled with Trump Derangement Syndrome that no matter how much it would benefit our country and the world; they would never give Trump a “victory”. If it came down to it, they would leak everything to the media no matter what the consequences.”

Senator Jones is a cosponsor of the legislation and a member of the Senate Armed Services Committee. Eight moderate Republicans voted with the Democrats on the resolution.

Advertisement

Senator Jones has also been criticized by Republicans for his comments that he was “appalled” by Pres. Trump’s actions following his acquittal on both Articles of Impeachment.

“Newsflash for Senator Doug Jones: Most Alabamians have been appalled by his actions his entire time in office,” former Attorney General Jeff Sessions said. “It’s about time we send Doug home, and replace him with someone who understands our values. Alabamians deserve a Senator they can be proud of again.”

Sessions is a candidate for the Republican nomination for Jones’ Senate seat.

Advertisement
Advertisement

The Republican primary will be on March 3.

Continue Reading

News

Moore says the Constitution is under God’s laws

Brandon Moseley

Published

on

Saturday, Senate candidate former Chief Justice Roy Moore (R) presented his views on the Constitution and the sovereignty of God to attendees of the Conservative Leadership Conference in Florence.

“The form of government is both the Declaration and the Constitution,” Judge Moore said.

Moore argued that the rights granted to the citizens in the Bill of Rights do not come from the Constitution itself; but rather from God and the Constitution is there to protect those rights that God has ordained.

“The Constitution is the supreme law of the land; but the Constitution is under the rule of God,” Moore stated. “We as Americans, as Republicans as Democrats should go back to the Constitution.”

“Democrats are trying to move us toward a socialist government,” Moore warned. “The same people who want to take our guns away want to take prayer out of schools.”

“Most Christians do not understand the Ten Commandments,” Moore said. The first four are the duties that we owe to God and the last six are the duties that we owe to each other.

Moore quoted from Washington, Blackstone, and the 1954 legislation that inserted “under God” into the Pledge of Allegiance.

Advertisement

Moore said that Project Birmingham used Russian style tactics to undermine the support for Roy Moore and build up support for Doug Jones. Moore also blamed Richard Shelby for his defeat.

Moore said that Democrats have used similar smears liked the ones used against him in 2017 against Brett Kavanaugh and Clarence Thomas.

“When you vote is stolen from you by tactics that is wrong,” Moore said/

Advertisement
Advertisement

Moore warned that the greatest threat to this nation is the decline in morality. “We are at a critical point in our history.”

Moore warned that no nation could take us down from without; but that we could fall from within and warned of the growing agenda of the LGBTQ community.

“We are starting to recognize transgender rights above the right of your rights,” Moore warned.

“We are five votes (in the Senate) away from overturning everything our country is founded upon,” Moore warned if the Equality Act is passed. The Equality Act, “Which sounds good is about to take away the most precious thing our country is founded upon: our freedom of conscious.”

Moore warned that the legislation would lead to men in girls’ bathrooms and in girls’ sports.

Moore said that when man invents rights that are not from God it leads to problems. The right to privacy was invented and from that came the right to abortion, which has resulted in the deaths of millions, the right to sodomy, and the right to gay marriage. Now we are about to create a right of transgenderism.

Moore said that marriage was ordained by God as between one man and one woman. “If you can make it between two men you could make it between five men and between a man and a horse.”

“How do you correct it?” Moore asked rhetorically. “You recognize the sovereignty of God.”

“I have been mocked and removed from office twice,” Moore said.

“I am sick of seeing politicians carrying Bibles and doing nothing,” Moore said. The national debt was $5 trillion in 2005 now it is $23 trillion. They say they are Pro-Life and yet Planned Parenthood continues to get taxpayer dollars.

“We keep quiet because we are afraid it is going to offend anybody,” Moore said. “I couldn’t keep quiet about Obergefell. I wrote an opinion in API.”

Moore is a candidate for the GOP nomination for U.S. Senate in the Republican primary on March 3.

Continue Reading

House

McCutcheon is in “wait and see mode” on medical marijuana bill

Brandon Moseley

Published

on

Speaker of the Alabama House of Representatives Mac McCutcheon (R-Monrovia) last Thursday was asked by reporters where he stood on pending medical marijuana legislation.

“I am in a wait and see mode,” McCutcheon told reporters. “The sponsor of the bill has done a lot of work.”

On Tuesday, State Senator Tim Melson (R-Florence) introduced a bill to legalize tightly controlled medical cannabis. The Medical cannabis bill introduced on Tuesday is Senate Bill 165.

“We have a letter from the Attorney General,” recommending that the legislature reject the bill.

Attorney General Steve Marshall (R) is arguing that while marijuana remains a federally controlled substance the legislature should not pass a state law that would be noncompliant with federal law. Marshall believes that if medical marijuana has any medical benefit then the federal Food and Drug Administration (FDA) will be the appropriate authority to approve such legislation and the state should wait for FDA to act.

33 states already have legalized medical marijuana.

“It brings up a legal question when you get a legal opinion from the attorney general office,” McCutcheon explained. “It answers some of my questions and also on the pro and the con there were some questions raised in the legal community.”

Advertisement

McCutcheon said, “That is why we are in the mode that we are in.”

Melson introduced a medical marijuana bill last year during the 2019 regular session. That bill passed the Senate; but had difficulty getting out of committee in the Alabama House of Representatives. Instead of passing medical marijuana legislation the legislature passed a bill extending Leni’s Law and Carly’s law and establishing the Alabama Medical Cannabis Study Commission tasked with making a recommendation to the legislature.

The Alabama Medical Cannabis Study Commission was chaired by Sen. Melson and met monthly from August to November. In December, the commission voted in favor of a draft proposal recommending that the state allow licensed medical providers to prescribe marijuana based medications to patients with a demonstrated need. The state would create the Alabama Medical Cannabis Commission to regulate medical cannabis in the state. Farmers, processors, transporters, and dispensaries would have to get a license from the Commission and product would be strictly regulated.

Advertisement
Advertisement

Despite the Commission’s recommendation, SB165 remains highly controversial in the legislature and there is expected to be considerable opposition to the bill. SB165 is 82 pages long.

SB165 has been assigned to the Senate Judiciary Committee. Judiciary Committee Chairman Cam Ward (R-Alabaster) told the Alabama Political Reporter that there will be a public hearing on SB165 on Wednesday, at 8:30 a.m. in the Alabama Statehouse room 825. Opponents and proponents will both be given the opportunity to voice their opinions.

Thursday was the fourth day of the 2020 legislative session.

Continue Reading

Elections

Congressional candidates call on Sessions, Byrne to stand up for South Alabama

Staff

Published

on

By

At a rare joint press conference, the Democratic Candidates for the First Congressional District called on Rep. Bradley Byrne and former Sen. Jeff Sessions to stand up for South Alabama following the Trump Administration’s proposal to cut nearly $300 million slated for projects awarded to Austal.

“The current administration’s decision to divert that funding from Austal to build the border wall is harmful to our community and will potentially put good jobs at risk,” said Dr. James Averhart, CW05, USMC retired. “This is nothing more than a political stunt on the backs of the hard-working men and women of South Alabama.”

Over the years, South Alabama has become a hub for shipbuilding and defense projects developing ships and planes for the United States military.

“While the President may be comfortable playing political games with our communities, our representatives must stand strong against this disastrous decision,” said Dr. Kiani Gardner, a scientist and professor. “We are grateful Senator Jones is speaking out against it and the devastating impacts it could have on our communities.”

This matter transcends partisan politics, our Republican representatives must stand with Senator Jones and tell President Trump to find a better way to protect our Southern border,” said Rick Collins, a longtime Mobile businessman.

This is only the latest Trump Administration proposals that could have devastating impacts for the local economy. Recently, the administration proposed new tariffs that would have a significant impact on Airbus’ local operation.

 

Advertisement

Continue Reading
Advertisement

Authors

Advertisement

The V Podcast

Facebook

Trending

.