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This strategy could backfire if state retirement fund returns don’t rebound. Recent history isn’t encouraging: In the decade through June 2010, the nation’s biggest state retirement systems earned less than half of what they needed to keep up with pension obligations, according to a Bloomberg survey. Borrowing to pay pension benefits “is risky for a government,” says Douglas Wood, Fort Lauderdale’s director of finance. “If the market stays down and the pension systems don’t earn their fair share on their return, then over time the city has to make that up” from its general budget.
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Again, who’s going to cover the pension shortfalls?
Nice to be able to invest with losses being backstopped by the taxpayers.[/quote]
Yup, we taxpayers and our children are screwed. At least at the state/local level there is an option…Eventually, move out of the area so you don’t have to pay for this shit… More and more, I understand why folks have thought about moving…CA has a lot fo benefits to live here… Good weather. Good jobs (more or less)…Friendly people.
But this is an unheard of type of compensation package…In which if your own investments don’t meet completely unrealistic returns (in today’s markets), the taxpayer ends up paying the difference? That’s just absurd…
