Nobody really knows when the next recession will be or how bad it will be. Whenever it does arrive, the most interesting impact will be on the pension funds.

Nobody really knows when the next recession will be or how bad it will be. Whenever it does arrive, the most interesting impact will be on the pension funds. A terrible but short recession e.g. 50% equity decline for 1-2 years after which the Fed re-inflates the market is not as bad as a prolonged period of stagnation e.g. 20% equity decline and then no growth for 5-10 years. In the second scenario, trillions of dollars worth of pension funds head towards insolvency.