On August 13 , 2013 Ted Nesi trumpeted Providence pension plan returns had been 13.4% in Providence for the year ending June 30.and then described the plan as having $247 million in assets. Yet Providence own actuary showed assets $383,881,000 down materially from $422,800,000 the previous year.Welcome to the strange world of "Providence accounting" reinforced by a reporter lacking in proper inquisition, fact checking and void of analysis .
Mr Nesi then dutifully posted the Chart below showing Providence's positive returns over various periods of time. This ,nearly useless chart, is in direct conflict with the numbers I have looked at and highlighted below in yellow as "extremely misleading accounting".
Riddle -me -this-Mr. Mayor
How did the city of Providence pension assets go from $427 million dollars, when Taveras arrived on the scene, to only $ 380 million today if they had a positive return on assets? Taveras and Nesi show 7% annual returns over the last 5 years. Hmmmm. First ,considering the stock market had risen over 100% during the same period , that's not a very good performance even if was true. Second , and more importantly how did they manage to lose $47 million in assets and simultaneously claim a 7% annual gain on investments? Again welcome to "Enron style" accounting produced by providence and backed up by Taveras buddies in the press.
here's a replay and link to NESI's shoddy reporting in 2013
Taveras’s 13.4% pension return beats Raimondo’s 11.1%
Providence is significantly outpacing the state of Rhode Island in the battle of the pension plans.
Providence’s $247-million pension fund, the second-largest in Rhode Island, earned a return of 13.4% during the 12 months ended June 30 – more than two percentage points better than the 11.1% earned by the $7.55-billion state fund over the same period, according to data obtained from the city by WPRI.com.
So lets look at those assets over the last 5 years according to Providence ‘s own reports by their own self selected actuary.
Year end june 30,2009 Pension plan assets $405,217,000 cafr 6-30-09 pg49
Year end june 30,2010 Pension plan assets $427,891,000 cafr 6-30-10 actuary report pg 9
Year end june 30,2011 Pension plan assets $422,800,000 Buck exp rpt 6-30-11 pg 6
Year end june 30,2012 Pension plan assets $383,881,000 cafr 6-30-13 pg50
Year end June 30,2013 Pension plan assets $380,484,000 cafr 6-30-13 pg50
next blog we will discuss the recent warning by Providence Actuary that backs up my claim that Providence pumped up assets to appear better funded by approximately $57 million dollars.