Friday, April 10, 2009

Eating Our Seedcorn

PensionPulse reports on a story that should send cold shivers down the spine of every single person who is relying on, or counting on, a pension. A pension payout crash would be a huge blow to faith in the System, not to mention a very real hardship, if not calamity, for millions who worked hard and thought they'd been promised a secure cash flow in retirement. Those people vote and in large numbers, by the way...

Pensions Facing a Cash Flow Collapse?
...As for cash flow problems facing many pensions, they are the product of a giant experiment that was destined to fail. Instead of securing retirement income for millions of hard working people, over the last decade, pension fund managers slashed their allocations to government bonds and increased their allocations first to stocks and then to alternative investments like private equity, real estate and hedge funds.

In order to deal with this pension crisis, policymakers are faced with some tough choices ahead. These include cutting benefits, increasing contributions, raising the retirement age or increasing taxes to make up for the shortfall...

h/t naked capitalism

A blessed Easter to all of you. Keep your eyes open and your powder dry.

3 comments:

eliash said...
This comment has been removed by a blog administrator.
Harleydog said...

Big game of follow the leader. Critical independent thinking amongst the institutional money set died long long ago.

FYI I came across this site as an excellent source of pension related news.
http://www.pensiontsunami.com/

All the best,
HD
Prudens Speculari

Flagg707 said...

Thanks for the link!