http://online.wsj.com/articles/andrew-g-biggs-public-pensions-need-gamblers-anonymous-1417563447
OPINION
Public Pensions Need Gamblers Anonymous
Retirement funds for Illinois and California hold 75% risky investments. The Texas teachers’ plan: 81%.
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Managers of government pension plans counter that they have longer investment horizons and can take greater risks. But most financial economists believe that the risks of stock investments grow, not shrink, with time. Moreover, while governments may exist forever, pensions cannot take forever to pay off their losses: New accounting rules promulgated by the Governmental Accounting Standards Board (GASB) and taking effect this year will push plans to amortize unfunded liabilities over roughly 15 years. Even without these rules, volatile pension investments translate into volatile contribution requirements that can and have destabilized government budgets.
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FROM FACEBOOK by O’Connell, Bill (MC1976)
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The real solution is to do away with defined benefit pension plans and replace them with defined contribution plans. That way when the individual leaves an organization, he takes with him all that has been contributed on his behalf and the relationship with the organization ends. No more actuarial headaches calculating how long someone will live, how to invest pension contributions to match that, no more shorting the contributions this year with the intent of making it up in the future. Every year should stand on its own. You work, you get a contribution to your retirement; done.
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Agree.
And, at least in New Jersey, there are many added political scams.
Like part-time jobs that get pension credit. Rightly or wrongly.
Like politicians who get pensions for their “public service”.
Like politicians and bureaucrats who “retire” and go back to work to earn more “pension credits”.
Like politicians and bureaucrats who double dip.
Time to end Gooferment pensions, period.
Try finding a non-Gooferment job with a defined benefit pension plan today.
Argh!
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he real solution is to do away with defined benefit pension plans and replace them with defined contribution plans. That way when the individual leaves an organization, he takes with him all that has been contributed on his behalf and the relationship with the organization ends. No more actuarial headaches calculating how long someone will live, how to invest pension contributions to match that, no more shorting the contributions this year with the intent of making it up in the future. Every year should stand on it’s own. You work, you get a contribution to your retirement; done.
Reinke Faces Life 