Pensions; Why Should Healthcare Be the Only Calamity on Your Mind, Today?

As you can see, I’m catching up on the items in my “to blog” pile. Here’s a pension-related exercise in predictive mathematics (paragraphs copied out of order):

For more than a decade, the state has anticipated annual returns of 8.25 percent for its giant fund — currently valued at almost $7 billion — needed to cover retirement payments for thousands of retired state workers and teachers. …
The difference between Rhode Island’s 8.25-percent projection and [Wilshire Consulting’s] 6.9-percent suggestion could mean tens of millions of dollars for state and local governments already facing mounting pension costs. …
While losing $2.4 billion during the near-collapse of financial markets between January 2008 and January 2009, the pension fund earned an average of 2.79 percent each year over the last 10 years, according to information provided by the state treasurer’s office, which manages the fund.

To repeat: A pension fund predicted to return 8.25% annually actually returned 2.79%, so the solution with which government officials are toying is changing the prediction to 6.9%. See, in government, predictions can be tweaked to coincide with political feasibility, not actual results. It’s not like we’re talking about real people’s lives, or anything.

0 0 votes
Article Rating
Notify of
Inline Feedbacks
View all comments

Show your support for Anchor Rising with a 25-cent-per-day subscription.