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This is just the tip of the iceberg. Many state, municipal, and private pension funds are badly underfunded according to the accounting formulas. In negotiati
by dzdt 10y ago
This is just the tip of the iceberg. Many state, municipal, and private pension funds are badly underfunded according to the accounting formulas. In negotiations with workers, particularly unions, it has always been easier for managers to make promises of pension payments down the line butnever so easy to put aside the noney needed to fund that. But also the accounting formulas are unrealistically optimistic. They assume that money put aside will earn returns at 7% annually or higher. The economy just isn't growing that fast anymore, and probably will not in the coming decades. So even pensions which are supposedly "fully funded" now are likely to come up short in the coming years.
- IOT_Apprentice 10y agoHow did they not see this 10 or 5 years ago? Who audits this fund?
- dzdt 10y agoHere's what the NY Times was saying 9 years ago : "The Central States pension plan ... was notorious for corruption in the 1960s and 1970s, but is now known for being underfunded." http://nytimes.com/2007/10/01/us/01labor.html http://nytimes.com/2007/10/01/us/01labor.html
- hga 10y agoExactly; those of us who were politically aware in the '70s heard "Central States pension plan" and had absolutely no surprise that the nation's worst managed big pension fund is again in big trouble. Per Wikipedia, matching my memory, it took the Fed 5 years to wrest control of it from the Teamsters, AKA Jimmy Hoffa Sr. and the Mob. A big thing back in those days, made even bigger when he disappeared in 1975.
- pkaye 10y agoI think pension funds are prone to abuse in many ways (underfunding, unrealistic expectations, over-promise.) Best to give everyone tax deferred investment accounts where they can invest in mutual funds or something diversified for the long term.
- lostlogin 10y agoIn the context of what you are saying, "noney" is a great typo.