 Quote:
Originally Posted by clifp
So when a insurance companies promises an 8% guaranteed increase in your lifetime payouts like Ralph's contract. The obvious question is where is an insurance company getting a 8% guaranteed return? The majority of insurance companies profits are made by investing the float (the difference between premiums collected and benefits owed). Insurance companies have the same investment opportunities as other institutional investors, and frankly aren't much different than individual investors. Just like we should be skeptical of public pension funds being able to achieve 8% returns on their investment, we should also be skeptical of insurance companies selling investment products that make the same assumptions.
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Exactly.
Quote:
Originally Posted by clifp
Public employers at least have option of raising taxes to pay for their pension obligations,...
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And, apparently, even that isn't enough:
A Path Is Sought for States to Escape Their Debt Burdens
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"It's tough to make predictions, especially when it involves the future." ~Attributed to many
"In theory, there is no difference between theory and practice. But, in practice, there is." ~(perhaps by) Yogi Berra
"Those who have knowledge, don't predict. Those who predict, don't have knowledge."~ Lau tzu
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