Archive for Thursday, September 8, 2011

Pension plans

Asking ratepayers to shore up Westar employees’ pension fund is a questionable proposition.

September 8, 2011


It isn’t much of a surprise that Westar Energy officials are asking for a major rate increase even after hitting its customers with $265 million in rate increases since 2009.

These officials say the new request is based on the need to maintain a reliable system, comply with environmental regulations and keep its commitments to its employees.

Of the $91 million Wester is requesting, $37 million would go to help shore up the Westar employees’ pension fund, which was hurt by stock market losses. Is this something the utility’s ratepayers should be expected to cover or is this a cost Westar officials should figure out how to fund — IF they think it is necessary — by putting more of their reserves into the fund or perhaps asking employees to contribute more? Should ratepayers be expected to make up for a drop in the stock market or poor performances by those managing the pension fund’s stock portfolio?

It is understandable that expenses have gone up because of new government regulations and, to a lesser degree, the costs of an expanded tree-trimming program intended to help reduce power outages caused by fallen tree limbs. However, it seems questionable for Westar customers to be expected to cover the costs of a poor-performing pension fund. The situation is especially ironic in light of proposals to increase state employee contributions to the KPERS retirement fund and perhaps move that system to a 401k model.

It will be interesting to see how the Kansas Corporation Commission votes on the Westar increases, which could add $6.50, or 8 percent, to the average customer’s monthly bill.


Ron Holzwarth 6 years, 9 months ago

I think the KCC should pass the requested increase.

Because as everyone knows, we just love to give away money.

Ron Holzwarth 6 years, 9 months ago

It would be a long story if I told it all, but I was once in the employ of a company that destroyed hundreds of thousands of dollars of KPERS' money, as well as the wealth of a few investment banks, and the wealth of many ordinary stockholders who thought they were investing in the future of the city in which they lived.

The owner of the company thought it was very funny that he was able to fleece KPERS, investment banks, and ordinary investors out of hundreds of thousands of dollars, in the aggregate, millions, and it was entirely legal.

I learned a lot while I was an employee there.

Another time, I was an employee of a company that was able to do nothing more than get a few hundred thousand dollars out of the investment banks for their own personal use.

That was chump change.

And wow, do I ever know a lot about investing now. Warren Buffet was entirely right when he said:

"Never invest in a company which you do not thoroughly understand."

Ron Holzwarth 6 years, 9 months ago

(I was not referring to a company here in Lawrence that is still in business.)

And, the correct spelling is: Buffett

Ron Holzwarth 6 years, 9 months ago

But, I think that "hundreds of thousands of dollars of KPERS' money" was not correct.

It was millions.

chootspa 6 years, 9 months ago

How dare employees ask that their employers to deliver on their contractual obligations?

kernal 6 years, 9 months ago

Sorry Westar employees, but most of your customers pension funds took big hits as well. If you want to build that fund back up, go knock on Wittig's door.

chootspa 6 years, 9 months ago

I say we buy them. Seriously, if they want taxpayer money, they need to accept taxpayer ownership. Their employees would also get a pension that way.

rwwilly 6 years, 9 months ago

Why should we have to guarantee anybodys pension? No one underwrites my 401-K. Practically every public employer or entity that guarantees pensions is in the red. We don't want to privatize Soc Sec because the market is too volatile and the average investor is too stupid. We have been unable to properly fund Soc Sec, Medicare and Medicade to date. Seems to me we are running out of options.

Ron Holzwarth 6 years, 9 months ago

The USA could try extortion. We've got lots of bombs, and the means to deliver them.

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