Public pensions are in big trouble. Union thugs try to squeeze every nickle they can out of their employers, government or private. Politicians always make promises with other people’s money to union thugs in order to grab their votes. It’s mostly Democrats, but there are some Republicans who are big union suckups too. Now, according to a report, as much as 85% of pensions could collapse in the next few decades.
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| 85% of pensions could collapse in the next few decades |
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Bridgewater Associates did an analysis of pension funds recently and concluded 85% of them will fail if returns average 4%.
Bridgewater notes that public pensions have just $3 trillion in assets to invest to cover future retirement payments of $10 trillion over the next many decades. It would take an investment return of roughly 9% a year to meet those obligations.
With the 30-Year long bond yielding a mere 3.5% and with stock valuation through the roof, I expect negative returns for 7-10 years.
Stretched out over 30 years, 4% seems about right. 9% is out of the question.
CNBC has further analysis in Report: 85% of pensions could fail in 30 years…
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