Councilwoman Stacy Head, the driver behind the pressure for changes, has been pushing for the board to bring in an outside consultant to help analyze the fund and walk the board through potential solutions.Stacy's consultant is going to recommend that we basically trash the retirement fund in order to "save it." It won't be necessary but that's really not the point.
The board had been hesitant in previous meetings, but it acquiesced Wednesday, voting to invite Head's preferred consultant, The Kapoor Company, to make a presentation on the pension fund and possible reforms.
It's not clear who would pay for the group's work should the board formally hire the company.
Kapoor is the same consultant that has been providing research to a working group created by Mayor Mitch Landrieu to find a sustainable plan for the firefighters' pension system, which is badly underfunded due to bad investments and the mayor's refusal to fully fund the system.
A banner year
The backdrop of potential cuts and political pressure couldn't have made it easier for the board to learn about the fund's drab returns in 2014, a banner year for Wall Street.
If you have a 401(k) or an equity mutual fund, you probably did well. The S&P 500, an index of blue-chip stocks, closed at a record high 52 days in 2014, finishing the year with a gain of 13.69 percent when dividends are taken into account.
The pension fund, however, increased in value by only 4.7 percent.
Thursday, February 19, 2015
Bull market for consultants
Obviously, somebody's found a way to make money on this mess.