PIMCO to Pensions: Get Real on Liabilities

Pension liabilities? Understated to unknown--

aiCIO - PIMCO to Pensions: Get Real on Liabilities: " . . . PIMCO's report follows follows a study from the Edhec-Risk Institute, which said that while investors were aware of pressures on public and private pension systems in Europe, a closer look into how each nation measured their liabilities uncovered some surprising results. "Due to the variety of national systems, obtaining a clear view of pension liabilities is not straightforward," the study said. To demonstrate, the institute used a uniform discount rate to measure each member state in the European Union's public pension obligations as a percentage of 2010 GDP. "Ultimately, the values for public pension liabilities that Edhec-Risk Institute has calculated can lead to solvability analyses that are substantially different from those habitually taken into account by rating agencies or investors, " the study noted. Click here to read PIMCO's full paper."

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