Underfunded and underperforming pensions are damaging our huge population of baby boomers that are entering retirement. The bad news? It’s only the beginning.
“The temptation for governments to negotiate unrealistic benefits was even greater than in the private sphere. Elected officials knew that, by the time benefits came due, they would be out of office. Union officials knew it, too. Once benefits were agreed to, cities and states chose to skimp on funding. Politically, it was always preferable to build the extra school or staff the additional fire station than to squirrel away more pension money.”
“This is a pity because, when properly run, pensions remain the best form of retirement plan. They do away with many of the risks born by individuals alone, such as outliving one’s savings or retiring at the wrong time. And most people don’t have the expertise to manage portfolios.”