• Registered: 03-28-2009
  • Posts: 257

Topic: Kaye Ivey PACT Forum

Folks, this afternoon a small group (11 or 12) met with Kaye Ivey at Representative Mac McCutcheon's invitation.  We had a very informal sit-down talk, lead off by Kaye Ivey. 

Ivey gave us a history of the PACT program from its inception by Wallace & Folsom.  She went through the whole economic situation and told us what we mostly already knew.  She said she did not have to mail out the famous February letter about the fund being in trouble, but she felt a moral obligation to the people to let them know what was happening. She insisted that the caliber of the Board of Directors was excellent and that when the market is good the fund gains and when the market is bad, the fund loses.  Well, you can't disagree with that! 

She said the fund needs a cash infusion and it is up to the legislature to see that it happens.  She urged us to get serious about writing our representatives and senators, etc.  She says we have enough money in the fund to last until 2014 and at that time, if we are still in dire trouble, the PACT owners will have to "consider alternatives."

Riley owns Pacts and told her he thought they were guaranteed.  She says the law says otherwise and she has to go by the law.  She is disappointed in the lack of action for us in the last session and feels the RSA audit (Resolution 150) was a delaying tactic. (This is one thing we agree on). The RSA audit should be finished by the end of August.  She said Bronner wanted uncapped funding availability for PACT to consider running it. (He has that condition for the Retirement Systems of Alabama.  Another blocker is Paul Hubbert of the AEA . He won't give up a dime. (enough said about him)  Another huge stumbling block was the university systems who are raising tuition by unreasonable amounts and refusing outright to compromise on tuition.  .But she feels the biggest stumbling block is the legislature. 

Her final advice to us is to wait until after the coming session to decide our courses of action and stay connected with each other.  She emphasized again for us to pressure the legislature to act - to prefile (before the session begins) NOW. 

We concluded by having a rather spirited discussion.

Sorry this is so long, but one more thing... the following is a new posting on the State's PACT site at http://www.treasury.alabama.gov/pact/:

PACT Program Account Info as of June 2009
Total Accounts since inception – 76,251
Active Accounts –48,549
Eligible to use Benefits – 19,598
Benefits paid since inception – 428,227,424
Benefits paid in FY08 – $58,582,000
Accounts Cancelled March -June– 1,627
Value of Cancelled Accounts - $20,449,976
May 22, 2009 - Many PACT purchasers have inquired about options for their PACT investment...for more information click here  PACT Program Account Info as of June 2009

  • Registered: 03-28-2009
  • Posts: 5

Re: Kaye Ivey PACT Forum

It may be true that Kay didn't have to send out the Feb letter but felt a "moral obligation to do so." But remember that this is the same woman who a month previously had urged the parents and grandparents of Andalusia to purchase PACTS, telling them that their very own Ricky Jones (who failed to make the March meeting) was vice-president of the board!

Did she feel a moral obligation to do that too?!!  The old actions speak louder...

No, the cynic in me thinks she sent the letter because she was getting ready to run for governor and knew that as soon as she did she would come under a lot of scrutiny and the state of the fund would be discovered. Her hope, I think, was that she could have announced the problem, the Legislature would have solved it for her, and she would announce her candidacy as the hero who saved the PACT. But she left it too long. She should have sent the letter in December so that the Legislature would have had the whole session to work on it. But all that is of course just my imagination at work.

But that she says she was under no obligation to inform PACT owners of state of fund is I think very revealing because it demonstrates again that it is NOT a 529 investment plan. Surely if it were a risky business she'd be obligated to issue annual reports, right?

Something new for me to look into.

  • Registered: 05-20-2009
  • Posts: 7

Re: Kaye Ivey PACT Forum

I, too, attended the meeting (7 July 2009@1300 in Madison at the Holiday Inn).  I'm grateful Donna took the time to document the exact words from Ms. Ivey regarding her conversation with Governor Riley-I think those words may become VERY relevant in the future.  I, too, recall Ms. Ivey's account of her conversation:  she stated that GOV Riley told her of course it's guaranteed, everybody knows it's guaranteed.  Hmmm......

This was also the first mention of the fund being viable at least thru the year 2014.  I know there are several important (and not so important) legislative members who are PACT owners:  the consipracy theorist in me wonders when these key legislators contracts would end? 

Honestly, I left the meeting with very little hope-I was fortunate to get rejuvenated at the initial Madison County meeting yesterday.  I left Tuesdays meeting believing I had just been told that: 
1.  The PACT board has no power to allocate money or 'prop up' anything dealing with finances.

2.  The key representatives of the legislature who could really make this happen are, in the end, solely obligated to AEA.  There may be posturing, sabre rattling, etc, but in the end there is no way legislators will obligate any funding that may negatively impact AEA.  It was also plainly stated that even though the primary university systems in Alabama absolutely refused any cooperation with regard to PACT, the legislature nonethless honored their funding requests when they came with their hands out.  It is certainly an oddity when an organization refuses cooperation when asked yet is funded as 'business as usual' by the very group they previously snubbed? 

3.  If I heard correctly, there was around 1.1 BILLION dollars coming to Alabama each of the next 2 years (via federal stimulus money)-this would've been the perfect opportunity to use monies that aren't going to be available in the near future-instead, the legislature chose to spend that money on programs that will exist well after 2 years-long after the stimulus monies have run out (which is one reason several governors refused the money). 

4.  Representative McCutcheon said he has received calls 'about 50/50; either for or against supporting PACT.  For the people who are against it, their primary reason was that they had attempted to invest their money on their own and had suffered about a 30-50% loss in the stock market-they feel PACT owners should 'share the pain'. 

5.  If I heard correctly, I was told that during the same time period that PACT lost about 35% if it's cash, Retirement Systems of Alabama (RSA) lost the same amount. 

6.  Finally-Ms. Ivey said she had a poll conducted in November 2008 to determine her viability of her candidacy as governor-it was favorable.  After the infamous 'letter', she had another poll conducted.  This poll, she stated, was very pointed and direct.  It asked those polled to rank their priorities in order of importance (1-13).  According to what I heard at this meeting, financial support for PACT ranked at or very near the bottom of this poll. 

I really need to start using a recorder for meetings like these, lesson learned!

Last edited by Madison Dad (07-12-2009 2:02:15 pm)

  • Registered: 03-28-2009
  • Posts: 257

Re: Kaye Ivey PACT Forum

I recently  had a request as to how to locate a new PACT booklet to replace a lost one.  I contacted the Treasurer's office and the following is their response:

We did not keep boxes of past brochures - only a file copy - - sorry.

Brenda Emfinger
College Savings Programs Director
1-800-252-7228
334-242-7515
brenda.emfinger@treasury.alabama.go

  • Registered: 03-28-2009
  • Posts: 257

Re: Kaye Ivey PACT Forum

Just wanted to encourage all you Madison County contract owners to do all you can to come to Montgomery on the 19th!  We need a big crowd!  I understand at some point we'll be able to order PACT T-shirts from this website.  Would love to be able to wear one to Montgomery!