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Funding ratios of corporate plans fall 15 points in quarter
“Year after year, the story remains the same: neither the public nor the private sector has shown a tolerance for the pain associated with the type of forward action needed to address the U.S. pension problem,” Howard Silverblatt, S&P senior index analyst and author of the report, said in a news release.
Year after year the story does remain the same. It's like we have debt and deficit monkeys on our backs. Go figure.
Markets, bond yields hammer pension performance
OTTAWA -- Stock market volatility and dropping federal bond yields were bad news in the second quarter for holders of Canadian pension plans.
Pensions can't make money with low bond yields any more than savers in general can? Who would have guessed?
Big Pensions Eye Lower Return Forecasts. Should You?
It’s no secret that public pensions across the country are seriously underfunded. What might not be so widely known is that many funds use an assumed rate of return of 8 percent. And based on what’s happening in California, that may be too optimistic.
8 percent returns may be too optimistic? It would only take 45 years to safely compound a total return of 8% at today's three month treasury bill yield (0.17%). It will just require some patience. That's all.
What? Pension plans expect it to only take 1 year? And they also expect to repeat the miracle 44 more times? Wow! I want to live in THAT world! Anything seems possible!
Real Estate Newsletter Articles this Week: Existing-Home Sales Increased to
4.15 million SAAR in November
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At the Calculated Risk Real Estate Newsletter this week:
[image: Existing Home Sales]*Click on graph for larger image.*
• NAR: Existing-Home Sales Increase...
11 hours ago
5 comments:
Great to have you back Mark!
I know that the suggested interest rates that 401k calculators use are often greater or equal to 6%.
with 6%+ it's easy to do some retirement dreaming. then when you realize you are making less, you figure you must be doing something wrong (take more risk???).
Of topic... it seems that the recent collapse extended almost half boomer retirement dates. Sounds like corporations were delighted to see that their experienced workers needn't replacements anytime soon.
Top reasons for postponing retirement: recession, home equity etc...
my 2 cents,
Remy
p.s. verification= "swears"
The Preposterous Pension Predicament
remy & G.H.,
There once was a man with an IRA
Who thought it would double in spite of
Low interest rates
And stocks held too late
But it hurt like a holy stigmata!
This follows on something that occurred to me the other day reading about some state selling assets to close the budget. The entire population should be outraged! Public employee boomers are selling assets bought and paid for by their parents to fund their closing working years and retirements at the expense of their children and grandchildren. Why doesn't the media report it in those terms?
AllanF,
I hear that!!
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