[quote=EconProf]CAR: if they were mostly in bonds, what would their rate of return be? Yes, that would be safer than the risky choices they are now turning to. But by getting only 3 – 5% on these safe investments they would be admitting that their “assumed” rate of 7.75% is phoney. They would be admitting to taxpayers that they are far more underfunded than they claim, and that taxpayers are on the hook for this huge unfunded future liability.[/quote]
What BG said.
The introduction of Wall Street scammers and parasites into the public pension fund universe is largely (I would argue almost entirely) behind the problems with our DB public pension systems.
Equity Dividend Yield VS 10 Yr US Bond Constant Maturity Yield:
Additionally, I believe that using more predictable and conservative investment vehicles is better, especially when dealing with defined-benefit pension funds.
