[quote=sdduuuude][quote=gandalf]People who are outraged about public pensions should FIRST direct their outrage at the financial industry. FOLLOW THE MONEY.[/quote]
But those in charge of the public employee pension system made the decision to rely on wall street by promising a certain output rather than forcing a certain level of input.
Focusing on contributions takes wall street out of the picture.
Why force administrators to meet a certain level of growth ? It is just stupid because you can’t count on the world to provide you a certain level of growth, and we clearly can’t (and shouldn’t) rely on wall street to provide it.
Just make the benefit contribution-based and whoever is manging the fund will do their best with the money.
Nobody is entitled to a 15% return and certainly the taxpayers shouldn’t be making up for the shortfall.[/quote]
Where are you getting the 15% return assumption? I’m not aware of any pension funds using those numbers.
The pension funds use historical return rates in their calculations. Unfortunately, when you have a financial system that’s designed to go through exaggerated boom-bust cycles, trying to gauge return rates gets tricky. Fix the actors behind the boom-bust cycles, and the “pension crisis” will be fixed.
