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If it can't make a return on treasuries it is going to move into higher-risk asset classes, which will drive prices up, compounding the problem.
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If the stock market stays healthy, money will continue to be allocated to higher-risk asset-classes like venture capital and private equity.
The trustees say the rules require the pension fund to grow very quickly, forcing them to invest in higher-risk assets in search of higher returns.
This should encourage investors to switch to higher-risk assets.
Savings funds have a rising appetite for less liquid, higher-risk assets such as private equity and property.
Congress then made it worse by saying the banks could invest in higher-risk assets, while engaging in accounting tricks to mask the fact they were insolvent.
They may not be able to shift to higher-risk assets if they are dependent upon their portfolio for daily living expenses.
LOSING YOUR BALANCE Maintaining the balance of lower- and higher-risk assets is important, so that the actual risk you're taking doesn't get out of kilter with your tolerance to risk.
Pension funds and endowments typically see venture capital categorically as a high-risk asset class.
Michael Levy: Emerging markets were a high-risk asset class for foreign investors.
After you've reduced the risk, then take the cash and diversify beyond the stock market into other lower-risk asset classes.
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CEO of Professional Science Editing for Scientists @ prosciediting.com