Public Pensions, Doing the Right Thing

Doing the Right Thing - Bloomberg View: "... In 2013, San Diego County spent $103.7 million in investment and administrative fees. It is one of the highest-cost pension funds in the entire country. To review: A pension plan is failing to save enough to meet its retirement obligations, and rather than save more, it ramps up leverage. I am not fond of forecasts, so instead, I will offer one of two likely outcomes: Eventually, San Diego County’s pension fund blows up. The losses are spectacular, and the county' taxpayers are saddled with billions in new tax obligations. Alternatively, the townsfolk figure out how much risk is being put on their shoulders, and fires everyone involved, from the pension board to the advisers to anyone who voted for these shenanigans. I have seen this movie before. I know how it ends."

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