Louisiana lawmakers help kill bailout plan

Most House members from Louisiana voted Monday against a massive $700 billion bailout of Wall Street.

The House vote Monday to reject a $700 billion financial rescue drew a swift and pointed reaction from Wall Street: the largest one-day point loss ever in the Dow Jones industrial average.

Only two of the Louisiana delegation's seven members - Reps. Jim McCrery, R-Shreveport and Charlie Melancon, D-Napoleonville - voted for the plan, which failed
205-228.

"I just don't think the Treasury Department should be in the real estate business," said Rep. Rodney Alexander, R-Quitman, who voted no.

He questions who would manage the acquired assets and how cash-strapped banks would meet the bailout's requirement that they purchase insurance to cover future losses.

Rep. Charles Boustany, R-Lafayette, William Jefferson, D-New Orleans, Steve Scalise, R-Jefferson, and Don Cazayoux, D-New Roads, also voted against the bill.

The bailout has angered many Americans, who flooded lawmakers with calls, e-mails and letters in opposition. As of Friday afternoon, the office of Sen. Mary Landrieu,
D-New Orleans, had received 1,200 calls. Most were critical of the plan, said Landrieu's press secretary, Stephanie Allen.

The Senate won't consider the bill unless the House approves it in another vote. Landrieu is undecided, but Sen. David Vitter, R-Metairie, said Monday he plans to vote against it.

Crisis extra worrisome to those in retirement

The market's stomach-churning fluctuations in recent days are causing Americans – from billionaire T. Boone Pickens, who said he has lost $300 million because of the turmoil, to workers with modest 401(k) accounts – to feel increasingly queasy.

But it is those near retirement or already retired, who are feeling the crisis most acutely.

Financial planners and brokerages are reporting an uptick in calls and visits from nervous clients, but so far there hasn't been a rush to liquidate holdings or dramatically change investment portfolios.

As tempting as it may be to pull money out of the volatile market, it doesn't make sense at any age, said Larry McCulla, a partner at CBiz Financial Solutions in San Diego.

Worried consumers need look no further than the crash of 1987, when the Dow plummeted more than 22 percent in one day, he said. Despite that decline, investors who held onto their stocks were back in positive territory in less than two years, McCulla said.

“It's a question of why should you take unrealized losses and make them real losses,” he said

Number of Rhode Island state workers opting for retirement soars

As the state closes in on tomorrow’s deadline after which new retirees will have to pay more, in some cases double for their health insurance, hundreds of employees across state government have retired.

Thus far in 2008, 1,259 of the state’s roughly 14,000 employees have announced their departures, close to four times the number that did so between January and September of last year, according to the state treasurer’s office, which oversees the retirement board.

In a last-minute attempt to block the governor from imposing benefit changes, the state’s largest public employees union, Council 94, has taken the administration to court, saying it tried to “force” long-term employees to leave. But with both sides claiming victory after a hearing Friday, the outcome remains unclear and the parties are due back in Providence Superior Court this morning.

Until recently, Rhode Island was one of 11 states that paid 100 percent of medical benefits for most employees who retire with the required years of service before age 65, according to the National Conference of State Legislatures.

But this spring, the Rhode Island legislature voted to scale back retiree benefits to try and staunch a growing budget deficit and bring the plans more in line with private industry.

House rejects $700 Billion bailout

The House on Monday defeated a $700 billion emergency rescue package, ignoring urgent pleas from President Bush and bipartisan congressional leaders to quickly bail out the staggering financial industry.

The vote was 228-205 against the measure, with one member not voting. There was broad bipartisan opposition to the measure, with more than 90 Democrats and more than 130 Republicans voting against the bill. Republicans voted more than 2-1 to oppose the bill.

The vote came even though the measure was backed by Bush and House leaders in both parties. But opponents said the package granted the U.S. government too much power and was beyond the cost the government should pay to address the worldwide financial crisis.

LASERS-Did you know?

Funding for LASERS comes from three sources.

• Employee contributions
• Employer contributions
• Earnings from investments

Stock Dive Hurts State Pensions Across the Country

The pain on Wall Street last week also set off shockwaves in statehouses across the country.

AIG, Fannie Mae, Freddie Mac and Lehman Brothers were all favorites of big institutional investors like state pension funds because -- until this month -- they were relatively safe bets. Now they are all worth next to nothing.

Patricia Macht, assistant executive officer of the California Public Employees' Retirement System, or CalPERS, said that while the $235.9 billion fund did take a hit on some of those stocks it also has so many other investments spread out in other areas.

CalPERS, the largest public pension plan in the country, aims for a 7.75 percent return on its investments each year.

"We've rebounded from other market crises and will again," Macht said. "We're in it for the long term. One of the upsides of long term investor, we don't need to cash in soon."

State Retirement Systems doing fine despite troubling market conditions with AIG

Officials with two of the state’s largest public retirement systems — the Teachers’ Retirement System of Louisiana and Louisiana State Employees’ Retirement System — said late last week that only small portions of their investment portfolios deal with AIG.

Bobby Beale, chief investment officer for the state employees’ system, or LASERS, said the problems facing AIG happen with other securities from day-to-day and week-to-week.

LASERS Executive Director Cindy Rougeou said there have been no major disruptions because of AIG’s financial crisis. The system’s actuarial return on investments is at 8.5 percent, exceeding their target of 8.25 percent, she said.

Beale and Philip Griffith, chief investment officer for the teachers’ system, or TRSL, both said their systems’ investment portfolios are well diversified, which mitigates the effects of any such hiccups in the market.

CalPERS, Maryland Sec Lending Programs Respond to Markets

The securities lending programs of the California Public Employees’ Retirement System (CalPERS) and the State Retirement and Pension System of Maryland have taken steps in response to the current financial market turmoil.

Noting that "no other companies whose shares are in the pension fund's public stock portfolio are affected," the $220 billion fund said that it was "temporarily restricting the securities of Goldman Sachs, Morgan Stanley, State Street, and Wachovia."

In a press release, Anne Stausboll, Interim CalPERS Chief Investment Officer, said “We want to do our part and help mitigate the current instability of the market and any potential adverse short-selling impact on these important financial institutions. Our Securities Lending Program otherwise will remain the same."

Mansco Perry, Chief Investment Officer for the State Retirement and Pension System of Maryland, announced a decision to remove all financial stocks from availability to the System's securities lending program.

"We don’t want our long-term holdings to be borrowed by short sellers and used to aggressively push down stock prices and destabilize our financial system," said Nancy K. Kopp, State Treasurer and Chair of the System’s board.

Pension fund sues AIG

The chief executive of American International Group (AIG) is being sued by The City of New Orleans Employees' Retirement System for shareholder losses, which it alleges are the result of imprudent risk taking and mismanagement.

The public pension fund is seeking the return to AIG of all compensation paid to the CEO and directors, among other damages.

The suit said directors were “ill-prepared to monitor AIG's submersion into the sub-prime market and unduly heavy investments in credit derivatives, a business strategy that blew up in their faces.

The lawsuit followed another claim involving AIG and the Teachers Retirement System of Louisiana.

Kentucky pension system riding out economic news

Kentucky's public employee pension systems are in a somewhat stable position because of "conservative" portfolios, while riding out the bumpy stretch on Wall Street with the rest of investors, officials said.

"We are fairly well-diversified and we've had a conservative nature, so that has helped us not lose as much as other pension plans may be losing," said Robert "Mike" Burnside, executive director of the Kentucky Retirement Systems. "Our portfolio should protect us as much as possible, but we're still going to lose during this time period."

Burnside said the rate of return for the retirement systems' investments was down 4.21 percentage points during the fiscal year that ended June 30. He said it's too early to know how much that rate had slipped so far in Kentucky's first quarter of fiscal year 2009.

State Treasurer Todd Hollenbach, whose office monitors the more than $3 billion worth of funds the state's government has invested, said Kentucky does "hold a little bit of Lehman bonds." "But we're getting the payments on them, and we're not concerned about the situation," he said.

LASERS-Did you know?

Louisiana does not recognize common law marriages. Pension assets of a LASERS member remain the separate property of the member.

However, in the event of the member's death, minor children of the union may be entitled to certain benefits.

Oregon Public Employee Retirement System designed to weather market turmoil

As the stock market drops, so have Oregon's investment funds for the Public Employees Retirement System and other programs.

Even before the events of the past two weeks, Oregon's total portfolio dipped about 2 percent between the end of June through the end of August. Its total available for investment dropped from $75 billion to $73.3 billion.

"However, it remains a broadly diversified investment fund and is designed to weather troughs like the one we are currently experiencing — and indeed, have weathered in the past," said Ley Garnett, a spokesman for state Treasurer Randall Edwards.

"While we prefer not to experience declines of this nature, investment return volatility is the cost of investing in financial markets for long-term gain."

Oregon started investing in stocks in the 1970s. Investments are done by managers and overseen by the Oregon Investment Council, which consists of the state treasurer and four members appointed by the governor and confirmed by the Senate.

Vermont’s pension fund safe

Vermont State Treasurer Jeb Spaulding emphasized, that roughly 40,000 members and beneficiaries are in “no danger” of losing their pension because of the liquidation of Lehman Brothers Holdings Inc. and the $50 billion sale of Merrill Lynch & Co. to Bank of America.

“These are defined benefit plans, and the turmoil on the markets will have no impact on the security of their benefits,” Spaulding said.

Wall Street jitters will not cause Vermont’s pension fund managers to shift large sums of money. “We try not to sell low and buy high ... the one thing we don’t do is panic,” Spaulding said.

Vermont manages more than $3 billion, in three different pension funds, for public school teachers, state and municipal employees, Deputy Banking Commissioner Tom Candon said. The fund is managed by a six-member committee with the assistance of New England Pension Consultants of Cambridge, Mass.

State Social Services Secretary Resigns

The head of Louisiana's social services department has resigned after receiving heavy criticism from Governor Bobby Jindal about her agency's response to Hurricane Gustav.

Gov. Bobby Jindal had vowed to make changes at the state agency after the problems unfolded in the wake of Hurricane Gustav.

“I said before that there will be consequences. There will be significant changes made at the department,” he said last week.

Two of the biggest problems in the state’s response to Gustav traced to DSS. Showers were not in place for three days at shelters in Shreveport, Bastrop and Monroe. Disaster food stamp distribution was marred by long lines in the sun as the department scrambled to train workers to process applications.

Jindal reappointed Williamson in January. She was one of the few cabinet secretaries to be retained from former Gov. Kathleen Blanco’s administration.

Jindal appointed gubernatorial policy adviser Kristy Nichols to serve as DSS’ interim director. Nichols worked on the successful passage of Jindal's health care legislative package during the 2008 session, including legislation on mental health care reform, health care transparency initiatives, increasing health care technology, and increasing access to private health insurance for uninsured Louisiana children. Nichols previously served as a policy adviser for Jindal’s transition team.

Office of Group Benefits takes steps to assist plan members affected by Hurricanes

Many OGB plan members have been affected by Hurricane Gustav and
Hurricane Ike. To help plan members obtain the prescription drugs
they need, OGB has implemented two changes:

Plan members can refill prescriptions without the usual 30-
day restrictions.

Plan members who use an out-of-network pharmacy will pay
no penalties.

As always, a two-year history of medical claims for all covered
family members, including lab tests, X-rays and prescriptions,
can be viewed and printed using secure member login from the
OGB website (www.groupbenefits.org).

Treasury Secretary Paulson vows to maintain stability of US financial markets

US Treasury Secretary Henry Paulson vowed Monday to take steps to maintain stability in US financial markets, as the failure of US banking titans sent global markets into a slump.

"I am committed to working with regulators and policymakers - including Congress - to take necessary and appropriate steps to maintain the stability and orderliness of our financial markets," Paulson said in a statement.

Lehman Brothers, one of the highest profile investment institutions, declared itself bankrupt Monday after last-ditch efforts to find a buyer collapsed.

In the fallout, Bank of America took over Merrill Lynch in a 50 billion dollar deal, insurance giant AIG was reported to have sought a massive emergency loan to head off its own crisis and a group of banks set up a 70-billion-dollar global emergency fund.

The US Federal Reserve, European Central Bank and Bank of England injected tens of billions of dollars into money markets after the fall of the banking titans under the weight of the massive financing of bad loans.

Paulson, who took part in weekend discussions in New York, said the actions "will be critical to facilitating liquid, smooth functioning markets, and addressing potential concerns in the credit markets."

State on Ike alert

Coastal residents scrambled from low-lying areas Thursday as Hurricane Ike brought the threat of high winds and tides to Vermilion Parish and other places still reeling from Gustav and recovering from Rita.

The storm is expected to hit below Galveston, but because it is so large, it's sending high winds and a significant storm surge toward Louisiana.

"If you live in a coastal area, if you're in an area that flooded during Hurricane Rita, I strongly encourage you to evacuate," Governor Bobby Jindal said at a news conference at the Governor's Office of Homeland Security and Emergency Preparedness. "As it moves farther north or slows down, it's worse for Louisiana."

The coast is not the only area threatened by Ike. As the storm moves up through east Texas and possibly across north Louisiana, it could drop as much as three inches of rain on Shreveport, the governor said.

Although Jindal urges people to leave, he said he knows some people will choose not to do it. "If the storm changes track, we've got the boats and personnel to rescue people. If Houston is hit, that could definitely impact the supply of natural gas and gasoline," the governor said. The Houston area is home to several refineries and natural gas plants.

State offices close in Cameron, Calcasieu Parishes

State offices in Cameron and Calcasieu parishes were closed Thursday as Hurricane Ike moved through the Gulf of Mexico.

Louisiana officials say storm surge gates have been closed at Bayou Bienvenue in St. Bernard Parish, the Harvey Canal on the West Bank of Jefferson Parish, Bayou Lafourche in Golden Meadow, Bayou Little Caillou in Terrebonne Parish and Bayou Terrebonne in Terrebonne Parish.

Hurricane Ike is still on course for a projected south Texas landfall, but other areas of the Gulf Coast are still on alert.

LASERS-Did you know?

If a member selects the Maximum Plan as a retirement option, he/she will receive the basic benefit, paid monthly for the lifetime of the member.

It does not pay a monthly benefit to your spouse, or other dependents. Should you die before your member contribution account is depleted, your beneficiary receives a lump sum payment of your remaining member contributions.

Hurricane Ike remains fixed on southern Texas shore

A strengthening Hurricane Ike began its northwestward jaunt across the warm Gulf of Mexico towards an early Saturday landfall near Corpus Christi, Texas, as a dangerous Category 3 hurricane with winds of 120 mph.

With Hurricane Ike looking as if it will not be a major problem for Louisiana as the state struggles to recover from Hurricane Gustav, Gov. Bobby Jindal said he's relieved to have to worry about only one storm at a time.

Most of the state is "out of the cone of error" in the projected path toward south Texas, so Jindal said, "We reached out to them to see if there are any resources we can share."

"We would still have assets to evacuate southwest Louisiana, if necessary," the governor said. "If the track persists, we do not anticipate a large evacuation."

Since tides will be about 2 or 3 feet above normal as Ike passes, evacuations probably will be needed in low-lying areas that normally are evacuated.

Louisiana Extends Tax Deadlines Due to Gustav

The Louisiana Department of Revenue is granting filing extensions to taxpayers whose filing addresses or whose tax preparers' addresses are located in Louisiana communities declared federal disaster areas by President Bush following Hurricane Gustav.

The extended deadline matches one granted last week by the Internal Revenue Service for federal income taxes due from individuals and corporations, and estimated tax payments. The extensions are available on tax returns and payments due between Sept. 1, 2008, and Jan. 5, 2009.

Hurricane Ike takes track west

Hurricane Ike is expected to be in the southern Gulf of Mexico late today, but the latest projections now have the storm headed more toward the Texas coast.

Forecasters at the National Hurricane Center warn that Ike could make landfall during the weekend near the Texas-Louisiana border, possibly not far from Houston.

"While the exact location has not been pinpointed yet, all of southeast Texas and southwest Louisiana should continue to monitor the track and intensity of this storm." according to Roger Erickson, warning coordinator for the Lake Charles weather office.

Defined-benefit pension is a huge contributor to financial security in retirement

A recent study concludes that households with a defined-benefit pension as well as Social Security and savings are far less likely to outlive their savings than households without a defined-benefit pension.

The study conducted by Ernst & Young LLP examined the retirement savings and other resources for Americans with $50,000 to $100,000 of preretirement income. A couple with preretirement earnings of $75,000 that will have a pension has a 31 percent chance of outliving their assets. That couple without a pension has a 90 percent chance of outliving assets.

The study confirms what Alicia Munnell, director of the Center for Retirement Research at Boston College, has been warning for years - that a smaller role for Social Security benefits, rising Medicare premiums, and disappearing pensions will make the retirement of younger workers far more difficult than those of current and past
retirees.

State on Hurricane Ike watch

Gov. Bobby Jindal on Sunday declared a state of emergency for Ike and urged residents to get ready to head north again. He said so-called "hurricane fatigue" should not prevent people from evacuating their homes for the second time in 10 days.

"It is much too early to anticipate which areas along the Gulf Coast could get impacted," Jamie Rhome of the National Hurricane Center said late Sunday. The storm will probably not move into the southeastern Gulf until sometime Tuesday.

"It's early to say where Ike might make landfall, but once it's in the Gulf, it's obviously going to hit somewhere," said AccuWeather expert Dan Kottlowski said. "The warm, deep waters will give Ike the chance to restrengthen so everyone from Pensacola, Fla., to Corpus Christi, Texas, should be prepared.”

As with Fay and Gustav, Ike's track will be influenced by the strength and position of an area of high pressure to the north of the storm. Late Saturday, computer models continued to give different and answers to the final track of the storm and forecasters continued to emphasize that the storm is too far away for these suggested tracks to be reliable.