Sunday, October 11, 2009
Pension funds are caught in the middle
David Cho has a major story in the Sunday Oct. 11 Washington Post’s “Consequences of the Crisis” style, “Steep loses pose crisis for pensions: two bad choices for funds: cut benefits or take greater risks to rebuild assets”, link here.
There is an email list around called “pension tsunami”, and indeed public employee and union pension funds are in a bind: workers have been promised certain defined benefit pensions, that cannot be sustained in the “casino like” money factory that Michael Moore described in his recent movie (“Capitalism: A Love Story”), so either they make sacrifices, or there are more huge taxpayer bailouts down the road, primarily of the Pension Benefit Guaranty Corporation. Right now, the PBGC does guarantee most benefits up to a maximum amount, as has been explained before on this blog.