Report: 85% Of Pensions Could Fail In 30 Years

[Purveyor]

You might have thought your public pension was on shaky ground, but you're likely still being too kind.

Influential and well-regarded hedge fund Bridgewater Associates Wednesday warns public pensions are likely to achieve 4% returns on their assets, or worse. If Bridgewater is right, that means 85% of public pension funds will be going bankrupt in three decades.

Bridgewater came to these conclusions by stress testing the nation's public pension plans, much the way banks need to be evaluated on what could happen given a wide range out outcomes.

Public pensions have just $3 trillion in assets to invest to cover future retirement payments of $10 trillion over the next many decades, Bridgewater says. An investment return of roughly 9% a year is needed to meet those onerous obligations.

more...

http://www.cnbc.com/id/101572727

[upaloopa]

1. Part of the problem is that governments

have not funded pension plans using the money to cover other parts of the budget.
Unfunded pension liabilities are the problem. As courts let governments off the hook the funds overtime will collapse.
What we are doing is letting corporations and local governments put the costs of having employees off onto the federal
and state governments. When they have their domestic programs cut all of us will be on the street.

[cap]

3. With low interest rates and a lack of good investments with a good rate of return

Governments around the world were persuaded to buy all the funky securities (CDOs, CMOs, etc) that led to financial meltdown.

Add to that the refusal to raise taxes and the baby boom demographic, no wonder pensions are having problems

[cap]

4. Also young adults are getting brain washed into not supporting pensions

But not told that the granny you fund with your taxes might be your own. And that it's the choice of an independent granny or a granny moving in with you and you paying her bills and waiting on her.

There are laws on the books against abandoning your parents. They will be enforced.

[Gidney N Cloyd]

2. What do you suppose Bridgewater's angle is?

Any reason they might want all the money obligated to pensions, current and future, freed-up?

[bemildred]

5. More FUD. nt

[sinkingfeeling]

6. I read that the other day and my question is this. If pension funds can only

come up with 4% yearly growth, then how are individuals have enough money to cover their retirements? I was told that my 'investments' should be about 7% a year and I'm not in charge of a giant pension fund so how could I do that if the "experts" can't? There was a time, 15 to 20 years ago when one could get about 6 to 8% growth with certificates of deposit. Think you can get about 1% today.

[blkmusclmachine]

7. ,

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