ziggy29
Moderator Emeritus
I think you're spot on here. Part of the problem is that fund managers have their hands tied when the political powers that be promise benefits that require an 8-9% return to remain solvent. Change the benefit formula to only require 6-7% over time and suddenly it's a LOT more sustainable long-term. And when they need a higher return, some of them start dabbling in derivatives and hedge funds and other leveraged garbage that isn't appropriate for a pension fund.I'd be willing to bet that pension funds wouldnt be in anywhere near as bad shape as they are if they all just indexed everything in a standard 50/50 mix.