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She keeps misrepresenting facts; most recently implying that PACT had a good last fiscal year when it continued to trail other similar funds in returns.
She also continues to sell PACT parents down the river, by publicly opposing any public funding source.
Unbelievable.
Am I the only person outraged? I have never encountered someone like this in office.
Interested Parent you are certainly not the only one enraged by this whole PACT fiasco. Please underscore your rage by writing or calling your senator and reps. Try to bring in new members. If we are to prevail, people need to wake up and join us in our fight.
Last edited by dhpeacher (10-20-2009 2:24:23 pm)
We think Ivey is closer to the problem than most others - in a good and bad way. She's associated with the mismanagement, but she's probably also got a better perspective of the actual problem, which is two-pronged: both the investment strategy AND the insane rate of public university tuition inflation in Alabama.
Both will have to be addressed in fixing PACT for current contract holders. The market is helping, but cannot do it even with returns that exceed averages...because longer term, university tuition inflation that is 5-7 times the current rate of overall inflation cannot be tolerated. Our universities are criminally mismanaged and our state officials need to investigate and hold accountable those who run them.
I don't get it. The stock market collapsed last year the worst in 4 generations and Kay Ivey is getting the blame for an investment fund decreasing in value? Come again please? Hello, common sense? Please tell me this group is a legitimate advocacy group for a PACT solution and not a gaggle of nutcases. I've worked in finance for over 10 years and there was no mismanagement that I can see after studying the PACT Board reports. Folks, tuition is shooting through the roof and the PACT program was never a true guaranteed program. Correct me if I'm wrong, but Kay Ivey did not create PACT and does not control tuition increases. You folks looking to point fingers should be getting on the backs of your legislators for a fix. Kay Ivey ain't your problem and never was. Why isn't Jim Folsom Jr. lifting a finger to correct this thing? He created it and he controls the senate.
Pactpatriot, Ms. Ivey is the state treasurer, and was the state treasurer during the collapse of this fund's value. As holders of contracts with the state, we trusted the treasurer to manage the program on our behalf - our contracts are literally signed by Ms. Ivey herself. That the board entrusted a third party investment firm to invest our contracts in, mainly, stock equities, with no guarantee, placed our contracts at risks equal to (or greater than) private 529 college savings plans, but without the individual autonomy to manage and rate risk ourselves. In short, we entrusted our prepaid tuitions with Ms. Ivey, and on her watch, the fund became insolvent.
All of this places Ms. Ivey at the center of the problem, but also, we hope, at the center of a possible solution. The market's rebound helps, but she's absolutely right: we need to address out of control tuition inflation too.
You're correct that the legislature will be part of the solution to this problem, as they created the law that created PACT - and can fix the problem.
As for your comment regarding PACT "never being a true guaranteed program" you apparently didn't read our contracts or the marketing literature or the annual statements of benefits that were sent - under Ms. Ivey's signature - to our home.
Our contracts are for prepaid college tuition, and the terms of those contracts very clearly define what our boys will receive in return for the 26,000 dollars we submitted to the state. What the original authorizing legislation states is immaterial - we all know how this will resolve in a lawsuit, when that time comes. That's why Ms. Ivey - and others - are working so hard to find a solution that avoids litigation.
pactpatriot, Do you have a PACT 'contract'? If you did then you would know that the phrase you used, ie. "PACT program was never a true guaranteed program" does not apply to this CONTRACT. Like my husband states in the article to the Arab Tribune, "Is Alabama a State of honor or not?" As a retired Marine his whole life IS courage, honor, and commitment. When we committed to this, it was, and still is a contract. All we ask is that the State hold true to its side of this committment, i.e. the Contract.
I don't get it. The stock market collapsed last year the worst in 4 generations and Kay Ivey is getting the blame for an investment fund decreasing in value? ... Kay Ivey ain't your problem and never was.
Just to be clear on Treasurer Ivey's responsibility to PACT as per law -
In acquiring, investing, reinvesting, exchanging, retaining, selling, and managing property of the PACT Trust Fund, the board and any person or investment manager to whom the board delegates any of its investment authority shall exercise the judgment and care under the circumstances then prevailing which persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not in regard to speculation but to permanent disposition of funds, considering the probable income as well as the safety of their capital. When acting within this standard of care, no board member, or any person or investment manager to whom the board delegates any of its investment authority, shall be held personally liable for losses suffered by the PACT Program on investments made pursuant to this chapter.
Ivey and her Board continuously moved investments into riskier classes in an attempt to increase returns. Even though she added tremendous downside risk, no thought was ever given to purchasing a catastrophic hedge. As a fidicuary and primary caretaker for the PACT assets, it was her job to ensure that the events of late 2008 could not result in the inability to pay future tuition, or at least to attempt to mitigate such a possibility.
And, once the equity markets began their decline the PACT program never moved into less aggressive asset classes. Most prudent brokers I know that control large sums of others' money exercised prudence and methodically reduced their market exposure in late 2008, as did many personal investors in the management of their own affairs. Yet, she and her Board did NOTHING, and in fact seemed not to even know or care about the situation until the market slide had ended and an actuarial report was written after the fact.
To state, or even insinuate, that Ivey was a victim in this crisis is both ignorant and irresponsible. She was a bystander, by her own choice and contrary to what the law required, but in no way is she an innocent bystander. I believe she could be found guilty of negligence, but it appears that no case will ever come before a court unless a PACT tuition payment is missed.
Sure she wants to save PACT, but apparently, her motivation is to save her own butt and her remote chance to be Governor, not to honor the legal and moral agreements with the contract owners. Her political rhetoric and lack of support has become obvious, and others may save her butt, but she will never be called Governor.
KB you are a certified nut. And you need to go back to internet law school before you pontificate like Alan Durshowitz.
"She and her board" didn't move investments in riskier classes. They have kept a steady hand on things to keep ahead of tuition increases that have taken off higher than the space shuttle. Have you actually looked at the returns during her tenure, or are you so consumed with your agenda that you can't read numbers?
You shouldn't be allowed to play with computers. Negligence??? For what? Not buying a reliable crystal ball when they went on sale at Walmart? Did you get one? Pray tell, who is going to win the Super Bowl so I can put my mortgage up as a hedge against further PACT losses?
Did you read the paperwork you signed for PACT? No, really, did you?
You and some others in here need to get your anti-Ivey prescriptions filled at the local pharmacist and then get on the phone and rouse this do-nothing legislature we've got to put pressure on them for a real solution.
And gang, Greg Wren's legislation is a joke. It has no guarantee---none--- and isn't going anywhere in the next legislative session. Stop reacting like it was sent from Heaven's Gate. It is toothless, feel-good stuff not worth the paper its printed on.
We need a real solution, not more legislative hot air. WHERE IS FOLSOM?????????????? This is his plan, what is he doing about it?
OMG has Ivey hired a PR person to post on this forum? I have no agenda except to get my guaranteed tuition payments paid as promised.
As far as my Internet law degree, I didn't do anything but paste and refer to the law itself. Does that scare you (or her)? The law required her to consider both income and conservation of capital, and nowhere do I see that one objective has a higher weighting than the other. I haven't reviewed all of the Board meeting minutes under her tenure. Can you point me to a discussion of the conservation of capital? If so, I'll withdraw my comments and put an "Ivey for Guvnah" sign in my yard.
I think we've all seen the cumulative returns under her "steady hand" (why is it so easy for me to picture Kay herself saying these exact words in her comforting southern drawl?), and if these returns were positive then we wouldn't be having this discussion, and wouldn't even have this website to host such a discussion. Again, I don't have access to documents showing the changes in Investment Policy under her reign, but I believe a careful review would show a movement to riskier, more aggressive, funds. I don't care if they were chasing tuition or not - they clearly didn't catch it and fell flat on their collective faces w/ no safety net in place.
I have read every word of my PACT documents. What did I miss?
Why is it our job to get on the phone and rouse this do-nothing legislature? And when legislation is proposed, why does Ivey not support it? (Click Here)
Can you explain why Wren's proposal is a joke w/ no guarantee? "all benefits payable under PACT contracts in force as of the effective date of this act, regardless of the date the contracts were issued, will be honored by the state" Honestly, I don't know. Please help me. Internet law school didn't include a course on which laws should be considered binding and which ones would be toothless.
Yes, where is Folsom? When he was in charge the investment strategy consisted of fixed assets and government securities.
I don't care who gets this fixed. Ivey. Folsom. Riley. Wren. Obama. What I do care about is political rhetoric. I don't want to hear anyone declare "it's not my fault" anymore. Maybe it's not anyone's fault, or maybe it is. That's not for me to decide, and I hope it never has to be decided. If PACT does fail, it failed under Ivey's watch. That's unequivicol. This certified nut only wants her to spend more of her time publicly supporting us, and less time worrying about the governor's race.
Last edited by KBinHoover (10-31-2009 9:57:35 am)
We may have our first troll here (someone with no relevant business except to cause trouble or use the website as subterfuge for another cause).
I think referring to registered users as a "nut" or "nutcases" crosses a line of civility that shouldn't be tolerated.
I've been called worse names!
People get angry when you strike a nerve. I've seen a lot of anger in pactpatriot's posts. That's a good thing. Someone's reading this forum. They can strike out at me all they want, but in the big scheme of things there's only one way for Ivey to gain my support - start publicly seeking a solution for honoring the PACT guarantees. She can easily throw her weight behind legislation that could make this all go away. That's not to say she would be successful, but she could try. Yet, she continues to try to dance w/ 2 dates - the one that got her to the dance (her role as Treasurer) and the one she wants to take her home (her run at Governor). If she keeps it up, she'll soon be dancing alone.
I have a legal and finance background, reviewed many of the financials, and are familiar with the RSA report.
Statements like "The stock market collapsed last year the worst in 4 generations and Kay Ivey is getting the blame for an investment fund decreasing in value" is a canard. Its the type of statement that has confused and delayed a true resolution of this problem.
Of course the market tanked. But most other large educational endowments incurred much lower losses over the same period. The risk profile, and assumptions, adopted by Alabama PACT was inappropriate for a fund it its outflow horizen and profile. The state treasurer made it worse by being slow to address the issues publicly, and then making broad brush statements like "everybody lost money in the stock market".
Now the State Treasurer is making things worse, by publicly opposing certain types of state financial support for the PACT, and continuing to blame the entire problem on overall market conditions and rising tuition. Sure, these factors are a major contributor. But PACT is in the sorry state that it is in because the administrators were unwilling, or unable, to address this risk in a responsible fashion up front. They were chasing too high returns because the PACT business model in Alabama became unsupportable several years back. That increased the risk and volatility of the fund.
Kay Ivey isnt a bad person. We have all screwed up in our lives, and many of us have made bad decisions in our money management, regardless of whether we used professionals to carry out our decisions. Her problem is that she refuses to admit any culpability for PACT's state of affairs. Her efforts to defend her own reputation have hindered a resolution.
If PACT was a booming success, don't you think she would be taking credit for it? In such circumstances, she certainly wouldnt be saying "everyone made money in the stock market."
Its all about leadership.
I am much more sympathetic to some of the PACT Board members. Several are new, and all relied to a large degree on reporting from the State Treasurers office. To my knowledge, none have made any statement opposing any type of state support.
I am also outraged. I am also outraged that the legislature does not seem to care, as a whole. If they did care, they would have stepped up to plate last spring and passed some legislation at least to assure current contract holders.
Did I read the 11/24 article summarizing the Huntsville SavePACT meeting correctly? Did Ivey really wear a SavePACT t-shirt while continuing to babble about ways NOT to fund PACT? Seriously? Has she had an idea about how TO SAVE PACT yet?
Ivey, as state treasurer, oversaw the PACT board. Ivey did not offer a specific solution, but said that whatever happens, the state should not raise taxes or raid the Alabama Trust Fund. "I just believe us PACT folks are going to carry the day because we have a cause that is worthy," said Ivey, wearing the green T-shirt of Save Alabama Pact coalition.
Us PACT folks? Us PACT folks? Does wearing a t-shirt make her subject to losing $25k of tuition? What exactly does she stand to lose (besides of course a governor's race and potential lawsuit)?
One more thing. Back in August Kay had this to say:
State Treasurer Kay Ivey cautioned advocates not to allow anyone to politicize their issue. “The issue is about students and a job well done and parents who worked to save for them. It ought not to be a political issue. Don’t let it get to be,” Ivey said.
So if it's not a political issue and she has nothing proactive to suggest, and given that Ivey recently appointed a non-political Task Force to suggest ways to save PACT, what the &$^#* was she doing at the meeting wearing a PACT shirt other than campaigning?
Most Alabama voters are not PACT holders - only some of us are.
If our issue becomes a partisan political issue, or a "position" staked out by a particular partisan candidate, we lose support of roughly half the Alabama voters immediately. That's why we need to resist our issue being seen as "partisan" or "political" and keep the focus, as we have, on its morality.
You all are doing a great job advancing this message. Everybody agrees that fixing PACT is a moral imperative. That's exactly where we want to be.
Ultimately there WILL be a political solution to this mess, but we need to steadfastly avoid tying our cause to any particular candidate or party.
The day will come as we head into the elections and we need to be prepared to answer the question: who do we endorse?
We endorse nobody, no party. We can debate the merits of specific plans among us, but the bottom line is our standard: whatever proposed solutions we examine or score, it MUST honor the moral imperative inherent in our contracts: that every purchased PACT contract will be honored as specified, without compromise, according to the original terms of the contract. Any plan that does not meet this standard, we do not support. Any plan that does meet that standard, we support.
And yes, candidates will run commercials that say "Save Alabama PACT supports the xxxxxxx plan!" And there's nothing wrong with that. We support plans, not candidates.
If they want to wear our tee shirts, that's wonderful. But don't let them claim an endorsement.
Last edited by Jeff and Alice (11-27-2009 9:19:10 am)
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