What did we learn today during the last day of NCPERS16's General Session?
The last day of the NCPERS Annual Conference & Exhibition's General Session concluded today with a legal and governance theme.
1. If you invest in the stock of a publicly traded company, you are protected by laws- mandated fiduciary duties on directors of public companies to shareholders.
2. When your plan invests in alternative investments, laws don't protect you. You're entire relationship is governed by contract, therefore, request in the agreement that they have some fiduciary responsibility to your fund.
3. When engaging in international lawsuits, litigation funding is a new option. They loan the plaintiffs money and front all the expenses, they pay if there is any fee shifting, however, they get a big cut of the winnings (30-40% on average). This is useful in the UK, Australia, and Japan.
4. The greater the service requirements for DROP entry, the more expensive the DROP becomes.
5. The US spent $1.5 trillion in healthcare costs in 2011. This was the first year the baby boomers started turning 65.
6. 79% of people underestimate the costs of healthcare in retirement, or they just do not know the cost at all.
7. The average 65 year old couple will spend $259,000- $392,000 in out-of-pocket healthcare costs in retirement.
8. The NCPERS Code of Conduct provides a tool for public plans to have the ability to ferret out and identify any potential conflicts of interest.
9. What do we mean by not advocating against public plans? If you are, as an entity, affirmatively going to a policy making body, and testifying that DB plans are undeserving/ not efficient, etc.
10. Schedule A entities are think tanks, non-profits, etc. who have taken an unreasonable view of public plans. We welcome constructive critique of public plans, but the entities that are listed have gone above and beyond critiquing plans; they have said DB plans are inefficient, out-of-date, etc. They essentially take political doctrine and put “research” behind them