3 ms·
Too bad the ideological schmalz is being laid on too thick for them actually to get to the real question: why are state pension managers investing the money so
by woah 5y ago
Too bad the ideological schmalz is being laid on too thick for them actually to get to the real question: why are state pension managers investing the money so badly? This article could just as easily have been written by a right wing libertarian magazine about how government money managers are wasting everyone's money.
My guess, knowing nothing about the subject, is that "alternative investment" funds wine and dine the pension managers a lot more than a boring index fund will.
- _marlowe_ 5y agoYou can thank the Fed. Pensions and their consultants publish an assumed rate of return, which is increasingly difficult to obtain in a sustained low interest rate environment. They have been increasing exposure to private markets to compensate for low returns in fixed income("yield seeking"). There is additional pressure since public and private pensions are typically underfunded, and overly aggressive return assumptions give cover to the states and companies that don't fund them to the extent they should.
- djbebs 5y agoLike many things the answer is extremely simple. Because they are not the ones paying the cost of mismanagement, and they have a captive audience that is both legally prohibited to go elsewhere, and practically ignorant of how mich they are getting screwed.