Igy I was talking about Central States, and their rejected application to Treasury to cut benefits by 60%. Treasury said such a cut was insufficient to render the fund solvent.
PBGC's not going to help, CSPF is "too big to bail" for them. It will take a special act of Congress, if and when.
Like I've said here a million times before, there are no practical alternatives to the markets, even for "sophisticated investors" like the CSPF, and whoever manages their funds. They're lazy effers, as most are who use the markets. I can't tell you how much less work just riding the markets has historically required, than actually putting one's money to work in real business.
And those few who do very well in the markets spend essentially every waking hour doing it, not missing a beat--but let's face it, that's not the norm, even among portfolio managers.
These pension boards don't just pull these ridiculous projections out of their aszes, no--it is a combination of that, plus reliance on "expert" advice, which often amounts to no more than a sales pitch. Stay with us, you will get 8% going forward. Because it's not their money, because it's an easy route, because they have done something to cover their aszes, and because in the long run even the inevitable underperformance will still conform to market norms, they don't have a problem with it.
People are insanely lazy. It's not that they don't work, it's that they don't adapt--even when they do work, and work hard, they do the same thing they have always done, which makes them very efficient at it and excellent where the job calls for consistency and efficiency--but in a dynamic environment like the markets/investing, they SUCK, unless they are insanely well-capitalized, have significant political power, have inside information and use it, or some combination of all 3, so that they can can to some extent conform the market to themselves, rather than the other way around.
Yes it's a run-on sentence.
If they lack these qualities, the best they can hope to do is to get swept along with the bulk of the tide, which is what pretty much everyone does.
Pensions are screwed, and it's only going to get WAY worse. I can FEEL the capital levy coming, and I feel sorry for those who are not in a position to protect themselves.