Federation pension fund struggles

A retirement plan run by The Jewish Federation of Greater Los Angeles is more than $25 million underfunded, according to financial statements filed in October. The statements say the pension fund, which holds savings for more than 2,000 employees working for eight different Jewish-affiliated organizations, hold assets equivalent to only 76.1 percent of its projected liabilities. Because that number is below 80 percent, the Internal Revenue Service considers the fund in “endangered status” or a “yellow zone.”

“The truth is, it’s very easy to see a big number and get alarmed,” Federation Chief Operating and Financial Officer Ivan Wolkind said when asked about the fund’s status. But, he said, “It’s almost where we need to be.”

Indeed, the fund’s position had been getting stronger, improved from 71.5 percent funded in 2009, to 76.4 percent in 2011. But the most recent disclosures showed a slight dip in 2012.

“It’s not cause for concern,” Wolkind said. “There are plans, in Detroit, that are 30 percent funded. We’re actually in a strong position.”

One might suggest that the City of Detroit, which recently filed for bankruptcy, represents an extreme point of comparison. Yet Jason Hsu, an adjunct professor at UCLA Anderson School of Management, said many state and municipal pension funds are less than 50 percent funded. 

In those cases, he said, “Unless the state or the city is able to come up with a significant amount of money, the likely outcome is there needs to be a major negotiation. And people are going to get reduced benefits.”

The Jewish Federation’s case is far less severe.

“It’s really not that bad,” said Mindy Gassman, a licensed pension actuary, although she added, “It’s not a perfect situation.”

Nearly two cents of every dollar contributed to the Jewish Federation in 2011 went into its employees’ retirement account. For two other of Los Angeles’ Jewish nonprofits that receive funding from Federation — Vista Del Mar and Bet Tzedek — that distribution was nearly five cents of every dollar. Over the last few years, each nonprofit has paid 16 cents of every dollar of payroll into the pension fund. Wolkind said Federation operates the fund as “one of the services [they] offer to the Jewish community.”

Eight L.A.-based Jewish nonprofit organizations participate in what’s called a defined benefit plan, meaning that each employee, upon retiring, will be entitled to a specific amount based on a formula of their highest salary, how old they are when they retire and how many years they worked for their organization. The nonprofits pay into the fund, and the money is invested in equities, bonds and elsewhere. If the fund does poorly, or if employee salaries go up too quickly, or if any number of other things go wrong, the plan can quickly become underfunded. 

Representatives from four of the six biggest nonprofits in the Federation pension plan — Bet Tzedek, Jewish Vocational Service, Aviva Family and Children’s Services, and Vista Del Mar Child and Family Services — all declined to comment for this article.

The Zimmer Children’s Museum, one of the smallest organizations participating, has only three employees in the plan, and therefore pays far less than Vista Del Mar and Federation. 

“It’s an amount that hits us,” said Esther Netter, the Zimmer museum’s CEO. “It isn’t inconsequential.” 

Jewish Family Service spokesman David Gershwin offered only this prepared statement: “Jewish Family Service pension contributions have been stable for the last few years. And JFS will continue to participate in the pension plan administered by the Jewish Federation.”

In fact, Jewish Family Service of Los Angeles has been increasing its payments into the fund every year — nearly $1.4 million in 2012, $170,000 more than the year before. The amount that each organization contributes to the fund is pegged to employee salary — 16 percent of payroll, in recent years — and a rise in salaries is just one of what Wolkind said were numerous causes pushing up contributions. Another is the effort to close the gap between the amount of money the pension fund has and the amount of money it owes to future retirees. 

Bet Tzedek’s contribution rose more than $100,000, as well, to more than $520,000 in 2012 — a significant sum for an organization that takes in around $8 million a year in revenue. One source within the nonprofit told the Jewish Journal that Bet Tzedek board members are worried, but not too worried, about retirement costs. Their bigger concern, reflected in ongoing contract negotiations with their employees union, is the cost of employee health care, which is up to roughly $900,000 a year and shows no signs of letting up.

Projected retirement costs, at least, are expected to level off. In 2006, organizations that are part of the Federation’s retirement plan began enrolling new employees into a defined contribution plan — an example of which is a 401(k) — which pays money into a worker’s retirement account but has no fixed output and is, therefore, not put in danger of insolvency if the financial markets crash. Such plans don’t guarantee employees a set amount when they retire.

“It’s unfortunate,” said Regina Birdsell, president of the Center for Nonprofit Management. “Our sector doesn’t think about taking care of ourselves as much as we think about taking care of others. The donor community has very little tolerance for the overhead price rage. They want to know that all their money is helping the cause without thinking about the margins it takes for getting things done.”

Many pension funds invest about 60 percent of their assets in the stock market, which meant they were hit especially hard during the financial collapse of 2008. But what followed hit them just as hard: In an attempt to stabilize the economy, the U.S. Federal Reserve lowered interest rates as much as possible. That has increased retirement funds’ “liabilities,” which are essentially an estimate of how much money future pensions will cost the fund. The estimate goes up when interest rates are low, as it’s generally harder to get a decent return on your investment when rates are low. 

“It’s been a double whammy,” said Hsu, referring to the drop in stock prices followed by the slashing of the interest rate. “It’s increased the funding gap between liabilities and assets tremendously.”

And the Jewish Federation may not have all the options available to it that a private company might have to close the pension gap.

“The Federation has no way of doing what companies normally need to do — increase productivity,” said Gabe Kahn, a co-director of the Media, Economics and Entrepreneurship program at USC. “They’re a fundraising organization. They’re just shaking a tree and passing it around.”

Chicago urges city workers’ pension fund to divest from Iran

The Chicago City Council urged the city’s largest employee pension fund to divest from Iran.

The council unanimously approved a non-binding resolution this week that encouraged the Municipal Employees Annuity and Benefit Fund of Chicago to divest from companies doing business with Iran’s energy sector. Divestment would be gradual.

If the fund follows through, Chicago would join New York City, Washington and 11 other U.S. cities in divesting from businesses involved in Iran. A number of states also have divested from Iran or are considering legislation that would do so.

The Chicago-area Jewish Community Relations Council lobbied to pass the resolution. B’nai B’rith International praised the work of the Chicago City Council.

“Chicago’s city government has set an important example for other municipalities to get on board to isolate Tehran,” B’nai B’rith President Allan Jacobs, a resident of the Chicago suburb of Lake Forest, Ill., said in a statement. “Sanctions are working. Resolutions such as this are helping unite local governments as well as the global community in a cohesive effort to isolate Iran.”

Divest Now

I’ve been incredibly frustrated reading about the turmoil in Iran and feeling that all I can really do about it is watch more Anderson Cooper.

President Barack Obama himself had a hard time calibrating his response to the uprising following June’s rigged election returns, which allowed President Mahmoud Ahmadinejad to retain power. If Obama had shown too much support for the millions of protesters who took to the streets, they would have been derided as American stooges. If he showed too little, they would feel abandoned in their struggle for civil and human rights.

So if the President didn’t quite know how to help, how is John Q. American supposed to know?

Well, now we have our chance.

On Tuesday, July 21, the Los Angeles County Board of Supervisors voted to urge the county $9-billion pension fund to divest any assets or funds from companies doing business in Iran. The recommendation is aimed solely at companies assisting the Islamic Republic’s energy sectors.

Direct investment in Iran is, of course, prohibited by Federal law. But the County recommendation, proposed by Supervisors Zev Yaroslavsky and Michael D. Antonovich, calls on the County to divest its funds from outside companies that aid and abet Iran’s economy.

About 50 people crowded into a hearing room to debate Resolution 4, “to send a five-signature letter to the CEO and Members of the Board of Investment of the Los Angeles County Employees Retirement Association (LACERA), requesting that LACERA divest from those companies that are liable to U.S. Government sanctions by virtue of their investments in the Iranian energy sector.”

Fifteen speakers representing synagogues, the young professional Iranian-Jewish group 30 Years After, AIPAC, the American Jewish Committee, The Jewish Federation of Greater Los Angeles and others presented the case for divestment.

“I am here today, urging the Los Angeles County Board of Supervisors and County Pension Board, on behalf of my organization and countless other citizens of Los Angeles, to divest from companies doing business with Iran,” said Michael Yadegaran of 30 Years After. “As you know, the Islamic Republic of Iran is responsible for some of the worst human rights abuses in the world. L.A. County’s divestment will send a powerful message to all corporations currently doing business with Iran and will make other corporations think twice before entering into new contracts with Iran.

“As Americans, we reap the benefits of freedom and democracy. It is time that we punish those who deprive their citizens of basic human rights,” Yadegaran said.

The resolution passed with four votes: Supervisors Yaroslavsky, Antonovich, Don Knabe and Gloria Molina (Mark Ridley-Thomas was not present for the vote).

LACERA’s investment board will take up the resolution at its next meeting, which at press time had not been scheduled. But organizers point out that the resolution is non-binding, and the board is composed of appointed officials whose sole duty is to maximize the return on the pension fund’s investment. While some of the five-member board are known to be sympathetic to divestment, others are more of a question mark.

“I wouldn’t call this a done deal at the Investment Board,” said one organizer. “We will still have to explain the need for this, and political arguments don’t resonate to a pension fund.”

Proponents of the measure can and do argue that Iran’s tottering regime makes investments in companies that do business with Iran too risky for the public good. Right now companies like Nokia, which provided the hi-tech infrastructure that allowed Iran’s mullahs to dig into computer and phone records to root out dissidents, are facing worldwide public backlash. Who needs that headache?

But if the investment board takes a slightly more long-term view, they would have to wonder how well any of their investments would do in a world destabilized by a nuclear-armed Iran.

That’s why there isn’t a sane country in the world that wants Iran to have nuclear weapons. Israel and the Jews may have the most immediate stake in this — considering Ahmadinejad’s promise to destroy the Jewish state — but there is international consensus that an Iranian bomb would lead to a Middle East nuclear arms race, threaten the world oil supply, increase the risks of nuclear terrorism and blackmail, and make the current corrupt regime there even stronger. In a world where the current regime in Iran has the bomb, any Investment Board better be selling short.

Divestment and sanctions offer an effective tool in pressuring the regime in Iran toward collapse, or at least convince it to stop its rapid march toward developing nuclear weapons.

That’s the real reason for divestment, and it makes sense enough that there need be no others.

“Sanctions are a necessary prelude to a peaceful option,” Gidi Grinstein, who runs the Re’ut Institute in Israel, wrote me via e-mail. “Hence, divestment as part of a package of sanctions may not be successful on its own in stopping the nuclear project, but compounded with the two other legs of a credible and viable military option and a political package, it may work. An effective outcome is not guaranteed, but decisive action here is very important.”

Want to help make a difference in Iran? Write a thoughtful letter supporting divestment to:

William R. Pryor, Chairman, LACERA, P.O. Box 7060, Pasadena, CA, 91109-7060.

That’s our chance, and we had better take it.

Over 65 group could decide who wins this year’s presidential election

Many millions of dollars are being spent in both current presidential campaigns emphasizing personal qualities over clarifying the candidates’ stands on the issues. Now seniors take their politics seriously: While the 65-and-older demographic comprises only 12 percent of the nation’s population, in the last presidential election 73 percent of seniors reported that they voted—the largest percentage of any age group, according to a U.S. Census Bureau survey.

But neither candidate on the campaign trail has spoken often on issues that matter to seniors, and when they have, it’s been underreported by much of the media. So at the end of the day, how different are the candidates—and their respective political parties—from each other when it comes to issues of great importance to seniors, such as long-term care, Social Security, medical insurance and taxes?

Simply put, “the real fault lines between the two candidates’ positions are over how to treat people in the highest tax brackets. It gets to the heart of their economic philosophies,” said Leonard E. Burman, a senior fellow with the Tax Policy Center, a nonpartisan Washington-based tax reform group.

Sen. Barack Obama (D-Ill.), specifically through his campaign Web site and implicitly through the official platform of the Democratic Party, would shore up the needs of seniors at the lower end of the economic spectrum. He has proposed to eliminate income taxes for seniors making less than $50,000 a year.

“This will provide an immediate tax cut averaging $1,400 to 7 million seniors and relieve millions from the burden of filing tax returns,” the official Obama literature asserts.

Additionally, Obama would rescind the Bush administration’s income tax cut (that Democrats claim has benefited only the nation’s wealthiest citizens) and apply the windfall to his social programs, together with revenues from a slight tax rate increase for those earning more than $250,000. The increase would secure Social Security—without cuts and raising the retirement age—and finance his ambitious national health care proposal.

Although seniors already enjoy universal health care through Medicare, Obama argues that the program requires some tweaking because “catastrophic expenses” were “routine” and that, as currently applied, Medicare benefits do not cover expenses for most long-term care. His goal, he told the AARP, was to ensure that the program “protect seniors and families from impoverishment and debt.”

Sen. John McCain’s (R-Ariz.) and Obama’s positions are similar regarding the estate tax—sometimes referred to by the Bush administration as the “death tax.” Both candidates would retain a reduced version of the estate tax, although McCain would reduce it more than Obama, according to Factcheck.org and Snopes.com.

The Democratic candidate has proposed to apply the tax only to estates valued at more than $3.5 million ($7 million for couples), holding the maximum rate at 45 percent. McCain would apply it to estates worth more than $5 million ($10 million for couples), with a maximum rate of 15 percent.

Unlike Obama, McCain would renew the Bush income tax cut when it expires, which the Republicans believe will give citizens more cash to choose their own health care coverage options, should they use their rebate to pay for it.

The McCain attitude shaping policy—and that of the Republican Party, generally—is that seniors can manage their own lives without the intervention of government and that they should be free to choose their own way to solve many of these concerns. The Republican Party would not offer income-tax relief to seniors with incomes less than $50,000. The GOP believes that seniors already get federal help through Social Security and Medicare and often have economic advantages over other demographic groups.

It should be noted that McCain is a major proponent of privatizing Social Security, a program he termed “disgraceful” this summer, touching off protests by seniors at his campaign appearances in Pennsylvania and Colorado.

For seniors requiring expensive long-term care, McCain would privatize services and leave choices to individuals. He is a proponent of recent state-based experiments such as Cash and Counseling or the Program of All-Inclusive Care for the Elderly, through which seniors are granted a monthly stipend from which they can choose to pay home-care workers and purchase care-related services and goods.

McCain told AARP that eldercare matters should be decided within families and that “any way we can help caregivers” offset costs through tax credits or other financial incentives should be considered as “part of an overall policy regarding health care.”

How the senior vote will affect the presidential race in November is still a matter of debate. In 2004, voters ages 65 and older went Republican for the first time in years, backing President Bush more heavily than the rest of the electorate. Many of today’s seniors were influenced by Reagan conservatism, according to analysts in both parties, and they’re better off financially than the Roosevelt-era seniors, a fact that may favor the current Republican candidate.

Both campaigns are comin’ a courtin’ the senior vote. Obama has appointed a national seniors constituency director and the McCain campaign has launched an effort to encourage seniors to talk to their peers. States with the largest proportion of seniors based on total population—Florida, Pennsylvania and Iowa—are considered “swing states,” meaning that pensioners could very well influence the outcome of the national election.

How well informed senior voters will be is perhaps the most important issue of all.

Stanley Mieses is a writer, editor and broadcast commentator based in New York.

New Shoah pension deal gives survivors ‘recognition of suffering’

For Aviva G., the significance of last week’s announcement that more Holocaust survivors like her will be eligible for pension payments from the German government was not about the money. It was about principle and the notion that a certain degree of justice may now be done.

Aviva, 71, says there is no true compensation for years in ghettos, but she sees the new deal as a “recognition of suffering.” Aviva asked that her family name be withheld.

After extensive negotiations with the Conference for Jewish Material Claims Against Germany, Germany eased some eligibility requirements so more low-income survivors like Aviva can receive so-called Article 2 pension payments.

The agreement, which adds $250 million to the pension fund over 10 years, may be one of the last and biggest breakthroughs in the area of reparations to survivors, according to the Claims Conference.

The deal affects survivors whose income levels made them ineligible for payments in the past. Until now, those with annual income above $16,000 were excluded from the payments.

Under the new deal, income received from other pension sources, including governmental pensions, disability payments, retirement plans and the like, or a spouse’s income, will not be counted toward the $16,000 total.

The change effectively enables thousands more low-income survivors to collect pension payments from Germany. The funds will be distributed starting Oct. 1 and continue for 10 years.

“It’s a huge thing,” Gideon Taylor, executive vice president of the Claims Conference, said in a telephone interview with JTA. “It will make a big difference for a lot of people worldwide.”

Taylor said it took “a long battle” and months of negotiations to reach the agreement.

The Claims Conference will be launching a major advertising campaign to reach those who might be eligible, he said. Information about how to apply is available at Claims Conference offices and on its Web site, www.claimscon.org. There is no deadline for applications, according to Taylor.

The decision to lower the bar for eligibility comes just as Germany has enacted a law granting pensions to victims of the German Communist regime. For these victims, too, pensions and income from spouses will not count against eligibility.

The Law for Support of Victims of the Socialist German Dictatorship, the third post-reunification law aimed at compensating victims of World War II, was enacted Aug. 29. Low-income applicants who were imprisoned under the Communist regime for at least six months may receive 250 euro per month.

The additional payments for Holocaust survivors will be from the Claims Conference Article 2 Fund pension program, which currently distributes pensions to 51,000 survivors. The new rules will lead to a 10 percent increase in those who qualify for payments, or about 6,000 people, the Claims Conference estimated.

Aviva might be among the younger ones. Born in 1938 in Boryslaw, then part of Poland, she was a small child when German troops wrested the region from Soviet control in the summer of 1941. Most of the town’s Jews were killed, but Aviva’s mother managed to hide her in the ghetto while most other children were deported.

“When my mother found out that all the women and children and nonworking old men would be deported, we left the ghetto and hid in the woods, and then in the home of a Ukrainian woman who had worked for us,” Aviva said.

Her brother, who later was killed, gave the woman money to hide them. For a while, Aviva and her mother lived in the space behind a wardrobe pushed against a corner.

The woman “slipped the food to us from below,” Aviva recalled. “I could not be loud. I could not laugh, cry or shout. And afterward, for months I could only whisper.”

They were liberated by Russian troops at the end of 1944.

Aviva met her husband, Juergen, an engineer, in Israel, and returned with him to his native Germany in 1958. They had two daughters and now have five grandchildren who live in Israel.

For decades, Aviva was a social worker for the Frankfurt Jewish community. She and her husband are retired.

She said she received a small reparations payment from Germany of 5,000 Deutschmark in the 1950s — that’s worth about $3,500 today — “but that is nothing for the fact that I basically lost my childhood.”

She applied for Article 2 payments in 2000 but was told her income was slightly over the limit.

“That disappointed me a lot,” she said. “Thank God, I am financially not so dependent. It is more a moral issue. This suffering I experienced as a child was never recognized.”

A ‘Promise’ to Help Jews Overseas

A 100-year-old Jewish woman, whose closest relatives are dead, lives in a one-room walk-up apartment in the former Soviet republic of Moldova that she hasn’t walked out of in four years.

The thought of Klara Kogan, who exists on a paltry government pension, haunts Steven Schwager, executive vice president of the American Jewish Joint Distribution Committee (JDC), which provides relief and welfare to Jews abroad.

“We owe it to those people” to care for them, said Schwager, whose group provides Kogan with a home-care worker — and her only human contact. “Those people could be us.”

Making the case for funding overseas needs has become increasingly difficult for the North American Jewish federation system, which raises money for local, national and international needs.

Jewish federations have increasingly put their campaign dollars toward local social service and educational needs; today, roughly 30 percent of funds raised by federations go overseas, down from 50 percent in earlier times.

But the United Jewish Communities (UJC), the umbrella group of the federation system, wants to change that.

At its annual conference held in Toronto in mid-November, the UJC heavily promoted “Operation Promise,” a special campaign to raise $160 million over three years primarily to finance the aliyah of an estimated 17,000 Ethiopians of Jewish descent known as the Falash Mura.

The funds will also go toward the absorption of Ethiopian Jews in Israel, caring for the Jewish elderly of the former Soviet Union and invigorating the identity of its Jewish youth.

Despite the fanfare around the special campaign, launched in September by Israeli Prime Minister Ariel Sharon and endorsed by him via video conference at the General Assembly, there is real concern about how it will resonate with donors across North America.

But Carole Solomon, who chairs the Jewish Agency of Israel’s board of governors, said there was great urgency in expediting the aliyah of the Falash Mura and reuniting families.

“It’s our every expectation that they will provide the necessary funds to complete this chapter of Jewish history,” she said, referring to UJC and the federations.

The campaign comes amid another major development in the federation system’s overseas work — the creation of a new allocations system.

With the 1999 creation of the UJC — a merger of the Council of Jewish Federations, United Jewish Appeal and United Israel Appeal — came the Overseas Needs Assessment and Distribution Committee (ONAD), which comprised a cross-section of federation leaders to determine allocations overseas with the aim of increasing overseas dollars.

Fraught with politics and bureaucracy, the committee has cost several million dollars and has not substantially increased the allocation of overseas funds.

The system’s major overseas partners are the JDC and the Jewish Agency for Israel, which runs aliyah and Zionist education worldwide.

While the federations’ annual campaign, which tops $800 million, increased by 4 percent since 2000, dollars overseas have dropped by more than 4.5 percent since 2001.

The UJC board of trustees unanimously voted to replace ONAD with a system that allows the Jewish Agency and the JDC to hammer out their own agreement for the next two years. A group of federation officials will monitor the process and the UJC board must then approve the deal by the two agencies.

Some hope the new format — a modified return to pre-ONAD days, when the Jewish Agency and JDC negotiated their funds — will restore a spirit of cooperation to the process.

Others call the resolution a compromise document that will satisfy no one, and some lament the lack of minimum amounts required by federations to allocate overseas, given past shortfalls.

In fact, the critical issue of shoring up overseas funds remains in question.

“Nothing much will improve unless there’s an increase in overseas allocations, and that takes more than a document,” said Ellen Heller of Baltimore, the JDC’s president. “That takes advocacy.”

There is no formal advocacy committee, UJC President Howard Rieger told JTA. But the resolution allows for an aggressive approach to raising overseas funds, he said.

It asks federations to increase overseas giving, provides incentives for those that do and calls for the consideration of punitive measures against noncompliant federations.

For many local federation leaders, making the connection to overseas needs in general and Operation Promise in particular is tough amid so many competing local demands.

People don’t see overseas concerns as their responsibility because they have never seen the problems firsthand, said Michael Nissenson, president of the Jewish Federation of Greater Santa Barbara

Federations are also facing increased local costs due to growing numbers and budgets of local agencies like day schools, said Steven Rakitt, CEO of the Jewish Federation of Greater Atlanta.

Still, Rakitt said that “sometimes a special campaign has a way of providing a laser focus,” suggesting the new campaign will generate additional funds overseas.

“We have a responsibility to Jews wherever they live and an elderly person who’s hungry in Atlanta or hungry in Belarus is our responsibility.”

Operation Promise has already raised $32 million in pledges, according to UJC officials.

Several federations are responding to the campaign by soliciting individual major donors rather than rolling out a massive campaign.

Privately, several officials said they didn’t want to conduct a “second-line campaign” because it would raise questions among donors, who understand that the annual campaign already funds these types of overseas needs.

The UJA-Federation of New York, which has been a leading proponent of the push to expedite the aliyah of the Falash Mura, has already appropriated $5.7 million to the cause.

John Ruskay, executive vice president and CEO of the New York federation, said his federation would provide an additional $18 million over the next three years for the other elements of Operation Promise.

“This is our way of fully participating in Operation Promise,” he said. Jay Sarver, a UJC board member from St. Louis and the budget and finance chairman of the Jewish Agency, said that although the needs of Operation Promise are contained in the federations’ annual campaign efforts, the urgency of the situation demands more funds in a shorter time frame.

In Cleveland, the community has already pledged nearly 90 percent of its goal to raise almost $6 million for Operation Promise, said Stephen Hoffman, president of the Jewish Community Federation of Cleveland.

These pledges come on top of its annual campaign as well as a $137 million capital campaign.

Success comes “if you ask and you take the time to explain why you’re asking.”

Still, it may be a tough sell.

“It’s going to take some real strategic marketing and an incredibly intensive fund-raising effort to reach the $160 million goal, and if we don’t reach that goal the Jewish Agency and JDC are going to be in a tremendous debt situation,” said Richard Wexler, a UJC board member from Chicago.

Moshe Vigdor, director general of the Jewish Agency, said that “if we have less, we will be able to do less, unfortunately.”

But the aliyah operation is unlikely to be halted, even in a funding crisis, according to senior UJC and Jewish Agency officials.

“We have an obligation here,” Rieger said.

He noted that Ethiopia and Israel reached an agreement that officials say could prompt the Ethiopian immigration to begin in December.

The $100 million cost of funding the aliyah is broken down as follows: $23 million for preparing and educating the Jews before they immigrate, $40 million for their needs in Israeli absorption centers and $37 million for programs that integrate Ethiopians once they have moved out of the absorption centers, Vigdor said.

Zeev Bielski, the new chairman of the Jewish Agency, which will assume the bulk of responsibility for the education and preparation for the Falash Mura aliyah, said he hoped that the entire immigration would be completed by the end of 2007.




Hate Crimes Down; Jews Still Target

The number of reported hate crimes in Los Angeles County was lower in 2003 than 2002, and while that decrease is part of a 12-year decline, Jews remain a highly visible, often-targeted religious group.

The Los Angeles County Commission on Human Relations’ Dec. 16 hate crimes report stated that anti-Semitic hate crimes jumped by one, from 78 in 2002 to 79 last year. Statewide, the overall number of anti-Semitic incidents dropped from 223 in 2002 to 180 in 2003.

Despite less than 200 incidents targeting California’s Jews last year, Jews accounted for 84 percent of religiously motivated hate crime victims in L.A. County and 70 percent of such hate crimes statewide, according to the California attorney general.

Countywide, reported hate crimes dropped by 14 percent from 2002 to 2003; there were 692 such reported crimes in 2003 compared to 802 in 2002, a steady drop-off that has continued since 1991. The bulk of 2003’s reported hate incidents involved violent crime, including assaults, plus 10 attempted murders and one homicide, many of them gang-related.

Amanda Susskind, Anti-Defamation League Pacific Southwest Region director, said in a statement that the commission’s report showing an overall decline is “consistent with state and federal reports that show an overall reduction in hate crimes.” — David Finnigan, Contributing Writer

Pension Trouble

State Assemblyman Keith Richman (R-Granada Hills) is nothing if not bold. He’s introduced a California constitutional amendment that would scrap the state’s entire public employee pension system for millions of workers and replace it with a 401(k)-type system, as in the private sector.

Some background: Public employees in the state today contribute a specified amount, along with their public employer, to an organization like the California Public Employees Retirement System (CalPERS), which invests it on their behalf. Even if the investments fail, the worker will still get whatever pension that was promised when the worker took the job. If necessary, the state would borrow to cover the difference.

As most people in the private sector know, 401(k) plans have no guarantees. If the pension investments fail, too bad.

Richman said public pension benefits have increased too sharply, and have led to the current spate of borrowing to cover the difference. The state borrowed $3 billion in the 2004 budget to pay pensions. CalPERS, on the other hand, attributes the current borrowing to the devastating 2000 market downturn in its investments, a temporary setback. Nobody can predict, of course, when the market will go sour.

“In the 1970s, the corporate world started moving away from defined benefits for the same reason that the state has to: You don’t know from year to year what you’re going to have to [contribute],” Dan Pellissier, Richman’s chief of staff, told The Journal. “The promises that they’ve made to employees don’t match the amount of money they have on hand.”

CalPERS sees Richman’s proposal as shortsighted.

“When times are good, employers really make out on the deal,” said CalPERS spokesperson Darin Hall. “For all the school employees we cover, there were three years [before the market downturn] where their contribution rate was zero.”

When times are bad, everybody has to pay. But Hall thinks it’s in the taxpayers’ interest to at least give public employees (firefighters, police, civil engineers, etc.) that much support.

“I guarantee you that these doctors, architects and engineers can make twice as much money in the private sector as they’re making now,” said Hall, pointing out that the better benefits often sway professionals to work for the government.

A prospective firefighter today knows that despite the risks of the job, his family enjoys guaranteed retirement and disability funds. Would he really sign on if the state replaced that with a 401(k)? — Idan Ivri, Contributing Writer

2 Teens Arrested in Vandalizing of Menorah

Two teenage suspects have been arrested in the Dec. 15 vandalizing of a menorah at a Thousand Oaks shopping mall, police said.

Two days after the incident, Ventura County sheriff’s deputies arrested 18-year-old Kevin Bowers and a 17-year-old boy on hate crime, burglary and felony vandalism charges in connection with the incident at The Oaks mall. Police said the menorah was knocked off its table stand and then broken in half after being stomped by one of the suspects before they fled the crime scene in front of numerous witnesses.

Police believe the suspects are part of a loosely organized Conejo Valley white-power culture using the number 88 as a neo-Nazi code to make “Heil Hitler” salutes, because the letter H is the alphabet’s eighth letter and therefore “88” would reference “HH” or “Heil Hitler.”

Sheriff’s Sgt. Mike De Los Santos told reporters the suspects “admitted their part in the crime,” but that the 17-year-old juvenile said he committed the alleged vandalism at Bowers’ request and that he had not been associated with the neo-Nazis before.

Last year, a Conejo Valley home’s Chanukah decorations were vandalized, according to the Anti-Defamation League (ADL). Gennady Shtern, ADL Valley director, praised the menorah crime’s “swift arrest…. This hateful act against a symbol of the Jewish faith is particularly disturbing,” Shtern said. —DF

Professor Gets Prison for Fake Hate Crime

A psychology professor, who spray-painted her car with racist and anti-Semitic graffiti, has been sentenced to a year in state prison for falsely telling police that unknown vandals were responsible.

Pomona Superior Court Judge Charles Horan on Wednesday also ordered Kerri Dunn, formerly a visiting assistant professor at Claremont McKenna College, to pay the college $19,500 for extra security measures taken after she reported the apparent hate crime.

After Dunn reported the “vandalism” last March, the campus and Jewish communities reacted with outrage, staging daylong sit-ins, teach-ins, forums and rallies.

At the time, Dunn maintained that her car’s tires had been slashed, windows broken, and the exterior spray-painted with the words “Kike Whore,” “Nigger Lover,” “Bitch” and “Shut Up,” accompanied by a half-finished swastika.

In initial news stories, Dunn, a 40-year-old caucasian, was said to be converting from Catholicism to Judaism. As time went on, this aspect became increasingly vague, changing from “undergoing conversion” to “considering conversion” to “a possibility of conversion.”

However, after a brief investigation, Claremont police announced that two witnesses had “positively identified the victim as vandalizing her own vehicle.”

A jury convicted Dunn on Aug. 18 of filing false police and insurance reports. She could have received up to three years in prison.

Gary Lincenberg, Dunn’s attorney, insisted on his client’s innocence and said he would appeal the sentence. — Tom Tugend, Contributing Editor

Monitor Poll Leans Toward Divestment

A Christian Science Monitor poll ricocheting around the Internet has attracted Middle East activists, with almost 60 percent of the poll’s 1.2 million respondents saying that American churches should boycott Israeli-allied businesses.

The divestment poll was launched Dec. 6 by the Boston-based Monitor and was attached to a news story about mainline Protestant denominations considering divestment of church funds from Israel-allied companies. The 75,000-circulation daily newspaper poll’s question — “Should U.S.-based churches boycott certain companies doing business with Israel? — found 60 percent of respondents saying yes and almost 40 percent voting no as of Jan. 4.

Over New Year’s weekend, the Israel advocacy group, StandWithUs, sent out two e-mails urging its supporters to vote against divestment. That activism was opposite the work of the Palestinian-allied group, Americans United for Palestinian Human Rights, with its Web site stating, “Sign the poll on the CS Monitor Web site to support divestment!”

With the newspaper’s site getting about 1.9 million unique users per month, the poll’s 1.2 million participants are noteworthy.

“It’s the largest response that we’ve had in recent memory,” said Monitor online managing editor Karla Vallance. “The gay marriage poll would be No. 2. Both sides of an issue will spread word around and will vote and try to get the numbers up.”

Vallance said the activist-driven poll results do not reflect the Monitor’s regular online readers because, “it’s clearly being used for other reasons.” Because so many nonreaders wanted to influence the poll numbers, Vallance said the Monitor probably would give future polls, “a limited shelf life,” instead leaving them online indefinitely.

The unscientific poll’s “yes” response included the supporting statement, “The U.S. government has failed to act to curb Israel’s policies towards Palestinians,” while the “no” response stated, “It is discriminatory and does not help the peace process with the Palestinians.” — DF

People of the Book AWOL?

Abigail Yasgur is clearly proud of her domain, the Jewish Community Library of Los Angeles. Yasgur, who has directed the library with a tremendous store of energy and intellect for eight years, sweeps her hand over the custom-built Starbucks style checkout counter, the curved toffee-colored wood illuminated by a row of low-hanging mini-pendant lamps.

Cushy chairs form a centerpiece in the middle of low shelves, and little hidden nooks hold treasures for browsers and scholars amid the university-style stacks.

But when we get to Yasgur’s corner office three floors above Wilshire Boulevard, her concerns surface. The third floor of a corporate office building — 6505 Wilshire, in this case — is not the place for the community center she envisions the library becoming. She wants to see a storefront library with an auditorium and meeting space, where families and academics and teens and the intellectually curious can hang out.

But as Yasgur has been saying for years, circumstance has made the library one of the most underutilized resources in the city.

The library circulates about 200 books a day out of its 30,000-book collection, and has a database of about 4,000 patrons. Many of those people come for the children’s library on the first floor of the Federation building, and for the adult and children’s programming at locations throughout the city.

The library is part of the Bureau of Jewish Education, an agency of the Jewish Federation of Greater Los Angeles, a logical marriage since many of the library’s frequent users are educators or students. The Federation funds the library at about $182,000 a year, and Friends of the Library raise about $30,000 a year for programs and acquisitions.

But being part of another agency means the Library’s board is not fully empowered or energized, making it difficult for Yasgur to get started on the approximately $7 million she would need to raise to build her dream library.

So for now, she is doing what she can to get more people aware of what the library can offer. A service for the homebound allows books to be delivered directly to your door. Programs for kids and adults are increasingly held at other venues — public libraries and bookstores, or shopping malls.

The library has produced a public radio series on topics such as music, humor and storytelling that has been broadcast on stations nationwide. A summer reading program involves kids from places like Louisiana and Michigan. And programs such as lectures with authors, storytellers and family programming continue throughout the year.

Slowly, Yasgur knows, word will spread about her domain – the largest Jewish public library in the nation, tucked into the second largest Jewish community in the nation, where only a handful of people ever use it. — Julie Gruenbaum Fax, Education Editor


Federation Faces Underfunded Pension

Faced with a pension shortfall of $20 million, the organized Jewish community’s largest philanthropy finds itself forced to divert millions of donor dollars to employee retirement benefits, rather than to needed social services.

To cover the underfunded pension, The Jewish Federation of Greater Los Angeles and its 13 beneficiary agencies are slated this year to contribute $5 million to retirement plans, up from $4 million just two years ago. That means about 10 cents of every payroll dollar now goes to pensions, a higher percentage than at many other federations.

By contrast, the Jewish Federation of Greater Philadelphia spends about 3.5 cents on pensions, the Combined Jewish Philanthropies of Greater Boston about 4 cents, the Jewish Federation of Greater Atlanta about 4.5 cents and the UJA-Federation of New York 6 cents.

In addition to restricting cash that could be used for other purposes, the Los Angeles Federation’s underfunded pension has caused headaches for the agencies gaining their independence from the Jewish Community Centers of Greater Los Angeles (JCC) , a Federation beneficiary agency. The pension shortfall means that the Westside JCC, the Zimmer Children’s Museum and Valley Cities JCC might be responsible for paying off their share of the pension liability, a financial burden that could saddle them with tens of thousands of dollars in extra costs.

"I’d say it’s a concern, but I wouldn’t characterize it as a big concern," Federation President John Fishel said of the underfunded pension program, adding that the agency would cover all present and future pension payments owed to 120 retirees and 956 current employees.

However, agency heads speaking on background said the pension shortfall had made it more difficult to hire people, give raises or expand programs. They also worried that the relatively high contributions they’re now making could persist for years, putting a long-term financial strain on their organizations.

Whatever size the concern, it isn’t unique to The Federation. Corporate America has also experienced pension problems in recent years. Billions of pension fund dollars invested in the market vanished when the high-tech bubble burst and stocks plummeted.

Although Wall Street has come back some, U.S. businesses recently reported a pension shortfall of $278.6 billion, said Loretta Berg, spokeswoman for the Pension Benefit Guaranty Corp. in Washington, which is charged with protecting private-sector pensions of 44 million American workers and retirees.

California counties and cities are also struggling with pensions. Orange County, for instance, has shortfall estimated at $1 billion.

The amount of an unfunded pension liability often reflects how much money a company would need to pay off all earned retirement benefits if it terminated its retirement package.

Pension expert Lou Kravitz said The Federation’s shortfall, along with many companies’ pension problems, would likely disappear or shrink considerably in the next five to 10 years, as the stock market and interest rates rise as expected. Typically, pension liabilities move in the opposite direction of stocks and interest rates, said Kravitz, a former member of The Federation’s pension committee and head of the retirement plan consulting firm, Louis Kravitz and Associates in Encino.

"The amount of underfunding goes up and down, so it’s not something you necessarily should lose sleep over," he said.

Jack Klein, Federation executive vice president and chief operating officer, said his agency has addressed the agency’s pension shortfall by gradually raising plan contributions over the years and by changing the mix of stocks and bonds in which retirement dollars are invested. He also said The Federation and its agencies have 30 years to pay down the underfunded pension plan, more than enough time.

"I think The Federation, agencies and lay leadership have done a very good job of managing the pension fund," Klein said.

Agency executives agree — to a point. The Federation’s pension plan is "a great benefit that has kept people in the Jewish community, but it might be proving too expensive to maintain at its current level," said Andrew Diamond, president and chief executive of Aviva Family and Children’s Services.

Mitch Kamin, executive director of Bet Tzedek, another benificiary agency, said the plan has been great for worker retention. However, the costly benefit could be less appealing to more junior workers who might prefer the flexibility and portability offered by other options.

In an attempt to cut pension costs, The Federation has proposed modifying retirement plans for new employees, although benefits for current staff would remain intact.

Instead of offering new hires so-called "defined-benefit" plans, which guarantee an annual fixed income, The Federation now favors "defined-contribution" plans. Under those plans, employers set aside money for workers to invest in stocks and bonds of their choosing.

However, with defined-contribution plans, "the risk of the pension is in the hands of the employee," said Brett Trueman, a professor of accounting at the UCLA Anderson School of Management. In other words, if the market falters and wipes out workers’ nest eggs, corporations and nonprofits have no obligation to make up the losses, he said.

Locally, most nonprofits appear to have retirement plans that are both less generous and less costly than The Federation’s. A recent survey of 252 mostly Southern California nonprofits found that nearly four out of five offered benefits, but only 6 percent had defined-benefit plans like The Federation’s, said Pete Manzo, executive director and general counsel for the Center for Nonprofit Management in Los Angeles. That’s down from 13 percent a decade ago, he said.

"Nonprofits want to maximize their program activities, just like for-profits want to maximize shareholder value," Manzo said. "So they want to cut or contain costs."

Federation President Fishel said a lack of consensus among The Federation and beneficiary agencies led the organization to stick with the defined-benefit plan until now. Beginning in the early 1990s, The Federation reduced contributions from 6.6 percent to 3 percent and later to 1.5 percent. At the time, organization executives believed that the pension fund was flush or overfunded.

Jon Lepie, chief negotiator for the American Federation of State, County and Municipal Employees, Local 800, the union representing about 450 Federation and agency workers, said it appeared The Federation may have acted irresponsibly by lowering contributions. Without that tinkering, The Federation might have avoided the underfunding problem and the need to move away from defined-benefit retirement plans, which give workers more security and often more money than other options.

Fishel said the philanthropic agency used the savings from the lower rates to help "stabilize" Federation and agency programming that experienced significant funding cuts in the early 1990s. Later, The Federation and the agencies dipped into that money to raise salaries across-the-board. Klein, The Federation’s COO, added that the organization’s pension contributions have always exceeded legal requirements.

Union officials representing The Federation and beneficiary workers have reacted unenthusiastically to The Federation’s proposal to scrap defined-benefit pensions for new workers, although they have not ruled out accepting the offer as part of larger negotiated settlement.

"If we’re forced into cutting employment benefits because of management incompetence, shame on them," Lepie said.

Local 800 President Jeff Rogers said that The Federation had failed to live up to its contractual obligation to invite a union representative to pension committee meetings over the years. The presence of a union member might have "protected the pension," he said.

Klein declined to respond to Rogers’ charge, saying that it was inappropriate to do so at this time, because of the ongoing negotiations with the union.

Officials at the United Jewish Communities, the umbrella organization for the nation’s federations, said they had no information on the types of pension plans offered by individual members. However, several federations appear to have healthier retirement funds than the Los Angeles Federation’s.

The Atlanta Federation offers defined-benefit pensions like the local Federation’s but has no shortfall.

The Philadelphia Federation offers defined-benefit pensions to its employees and workers at 13 beneficiary agencies. The plan, which is underfunded by $1.5 million, offers benefits that are in some cases about half as generous as the Los Angeles Federation’s. Still, four agencies have recently dropped their defined benefits in favor of defined contributions, said Angela Falcone, Philadelphia’s chief financial officer.

The United Jewish Federation of San Diego County, like Atlanta, Boston and New York, has no underfunded pensions. The organization offers its employees a 403(b), the nonprofit version of a 401(k), and a defined-contribution plan.

Reflecting on the Los Angeles Federation’s situation, Elias Lefferman said change is in order. The president and chief executive of Vista Del Mar Child and Family Care Services said beneficiary agencies could no longer afford to set aside an increasing percentage of donor and grant dollars for underfunded pensions.

"We need a new plan," he said.

What a $230 Million Deal Means to You

After last-minute negotiating, Austria, the United States and Jewish groups signed an agreement two weeks ago under which Austria agreed to pay $210 million, plus about $20 million in interest, to cover victims’ property claims and unpaid insurance polices. The government also will pay an estimated $100 million in social welfare benefits to Austrian Jews.

The agreement will give lifetime pensions to all Austrian Jewish survivors, including about 10,000 living in the United States. In the joint statement issued by all the parties, Austria admitted its “moral responsibility” and said it is “facing up to the light and dark sides of its past and to the deeds of all Austrians, good and evil.”

“No amount of money can undo the tremendous suffering and losses that have been inflicted on our Jewish citizens,” said Austrian Ambassador Ernst Sucharipa at the signing ceremony.

Pieter Launsky-Tieffenthal, Austria’s bright, young and energetic new consul general, recently arrived in L.A. after a four year posting in India. (He met and married documentary filmmaker Aradhana Seth there.) We asked him how the agreement might affect Jewish natives of Austria now living in L.A.

Journal: Who is eligible?

Launsky- Tieffenthal: Former Jewish residents of Austria can apply for financial compensation for rented apartments, small- and medium-sized businesses and other properties, except for art.

Journal: How do they apply?

Launsky-Tieffenthal: They should send a letter via e-mail to nationalfunds@eunet.at
or via fax to 011-4314080389.

Journal: What about for art works?

Launsky-Tieffenthal: That law has already been in place for three years.

Journal: How was this settlement received by the Austrian public?

Launsky-Tieffenthal: This was considered the next step in a three-prong settlement that includes the national fund, restitution and reconciliation for slave laborers. It has gone down well.