Posted on 04/08/2009 9:44:16 AM PDT by TigerLikesRooster
Checkmate for Pensions?
The FT reports that investment losses hit public sector pensions:
The crisis facing pension plans for US state and municipal employees is deepening as investment losses deplete the resources of retirement funds for teachers, police officers, firefighters and other local government workers.
The largest state and municipal pension plans lost 9 per cent of their value of more than $2,000bn in the first two months of this year, according to data from Northern Trust. That followed a loss of 30 per cent in 2008, equal to about $900bn. Smaller funds, which underperform the larger ones, lost more, experts say.
The losses have left retirement plans about 50 per cent funded – that is, they have only half the money needed to cover commitments to 22m current and former workers, experts say. State governments typically put the funding figures closer to 60-70 per cent, although most experts use different calculations.
(Excerpt) Read more at pensionpulse.blogspot.com ...
Ping!
Grim reading for everyone involved.
Grim reading for everyone, period. Cuz they’re coming for that money from the rest of us.
Yes, the only way they will meet the plans’ benefit guarantees will be to come to the taxpayers for it. So not only have we sustained our own (huge) investment losses in our retirement vehicles, but we will be unable to afford to save more to help ourselves, because we will be paying to restore the values to the municipal defined benefit plans. It will be very ugly for the rest of us.
I guess we should have planned better and gone into government work. So it goes.
Just wait for the GM bankruptcy. All those pensions gone, hello food stamps. We haven’t seen anything yet.
An economy based on paying money to people not working cannot last forever.
Among the pension funds’ with representatives on Friday’s call with Bair were the $174 billion California Public Employees’ Retirement System, known as Calpers and the nation’s biggest public pension fund, and its sister fund, the California State Teachers’ Retirement System, or Calstrs.
Calpers spokesman Clark McKinley declined to comment on the call.
Calstrs spokeswoman Sherry Reser said the $114 billion fund already has a program in place to invest in assets of distressed companies with the potential for returns that are better than fixed income. “We’re certainly assuming that there are going to be some diamonds amid the bits of coal,” she said.
Calstrs, however, is waiting to learn more about the U.S. government’s plan for distressed bank assets. “We’re seeing how this program is going to gel,” Reser said. “We’re not making any commitments. It’s just way too early in the discussions.”
Three of my relatives and several friends have paid into CALPERS for years. So what’s in there now? A wet piece of toilet paper?
Another older article here: http://www.bloomberg.com/apps/news?pid=20601109&sid=alwTE0Z5.1EA&refer=home
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