Detroit's public pension funds are said to be whack — more than $600 million underfunded whack — yet four trustees of two funds spent this weekend in Hawaii, all expenses covered.
Why, you ask?
To attend a conference that "provides the education they need to manage complex investments for the funds’ retirees and beneficiaries," the Detroit Free Press reports. Is there a problem? Kind of! The four headed to Honolulu with more than $22 thousand in expenses taken care of. In the name of education!
The Freep obtained records that show airfare, registration fees, lodging, meals and a per diem for miscellaneous activities were covered for the conference in beautiful sunny Hawaii.
Mind you, this isn't illegal — state law dictates public pension funds can spend up to $150,000 per year on "education" — but, as you may feel reading this, it's a stupid move. A real stupid move considering the insane position the city currently is in, financially speaking. (That's the correct term, right? Insane?)
When this broke, I envisioned Rob Roddy sitting ringside at the meeting of the Trustees when this was squared away back in December and February, microphone in hand, blurting out to the the lucky foursome that they JUST WON A TRIP TO HAWAII HOW DO YA FEEEEEL?
It feels good, Rod. It feels real, real good.
We could break this down bit-by-bit, but how about just jumping right to some highlights:
Officials response to if sending officials on lavish vacat...er, conference.
Detroit pension officials say the conference is no vacation, even though the 22-acre oceanfront resort boasts Waikiki’s widest stretch of beach and plentiful swimming pools and water slides.
“That just happens to be where the conference is this year,” said General Retirement System Trustee John Riehl, who will be attending. “We have to stay on top. We have to know what we’re doing.”
On the importance of this year's conference.
Cynthia Thomas, who serves as executive director for both funds, said the expenses fall within the systems’ travel and expense policies. She also said the conferences provide the trustees with an important education on public pensions. This year’s conference in Honolulu includes sessions on social media, pension actuarial science and trustee ethics.
“You do know that we don’t pick the locations for these conferences, right?” Thomas said. “The way conferences are set up, there’s not too many of them happening in Indiana or Kansas.”
The Freep provides a detailed list of expenses that each trustee has been allocated for, so head to the article because it's worth a look. One noteworthy point: Two of them were given $900 for meals. Here's what the NCPERS FAQ says about the registration fees:
The registration fee includes access to all educational sessions, conference materials, and food and beverage functions, including the Monday, Tuesday and Wednesday breakfasts, Sunday evening Welcoming Reception, exhibit hall refreshment breaks, Tuesday networking luncheon and charity reception and Wednesday night reception and dinner. You will not be allowed to attend these meal functions without a name badge.
At three meals per day, you can assume a person would eat between Sunday-Thursday about 15 meals. By my tally, the registration fees cover six of those 15 meals, leaving those two trustees with an allowance for food $100 to spend for each meal not covered in the fees. Not bad!
Early on the in the article the Freep cites the interim director of Los Angeles' fire and police pension funds who quips that trustees don't need to be going to Hawaii for a conference because they're not actually going to work hard and learn much.
I'm given pause at the timing of this because I wonder if there's anyone in the room who would say the same thing about next week's annual policy conference at Mackinac Island. Roughly 1,500 people attend including business leaders and movers and shakers from across the state. Politicians and journalists head north for what sounds nothing like this ineffective use of spending resources by the trustees that everyone is irritated about.
But I'm sure there's an outstanding explanation for why something like a big gala, er, policy conference needs to be held in Mackinac Island(!) and not some place closer. Perhaps some accommodations are available in Buena Vista Township. Or Lansing. Or Pontiac. Or, hell, pick any city listed here in this database of Michigan municipalities' current financial state with a score between 8-10. I assume some arrangements can be made.
(Photo courtesy of Wikimedia Commons)