Nor is a deep recession the right time to tackle the long-term problem of pension costs and the demographics of an aging population.
And a world in which Treasury bonds yielded even less would probably be characterised by slow growth and deflation not an environment in which CalPERS's equity portfolio would thrive.Even if hedge-fund managers did outperform a market index on a reliable basis, it would not solve the problem of pension funding.
The mostly bullish stock market of the past five years has lessened the problem of pension funding, says Mark Ruloff, director of asset allocation at pension consultant Watson Wyatt.
The problem of pension system incentives to retire early is further attenuated by another type of concern: the heterogeneity of workers.
Certainly, the idea of extending working lives will be an inevitable part of the solution to our demographic crisis, but just raising the state pension age will not make sufficient difference either to the public finances or the long-term problems of pension funding.
It's not as if the problem of public pensions suddenly got so much worse than it was before (the shortfalls have been building steadily for years, after all), nor is this new crop of governors somehow genetically bolder than their predecessors.
Farrell: In addition to bailing out the auto companies for a "mere" 10 billion or so to avoid the potential problem of defaulted pensions that could run to multiple tens of billions, I think "weaker" life insurance companies will be folded into bigger, better capitalized cousins with the help of federal investment.
Gov. Lincoln Chafee, an independent, and the state legislature last year scaled back pension benefits for state workers and retirees but did not address the problem of unfunded pension liability at the municipal level.
"Labor is using him as a red herring, to distract from the fundamental problem" of the pension fund's financial predicament.
Here HSBC thinks that the scope for Keynesian stimulus (as opposed to avoiding austerity) is limited by the size of existing government debts, and the looming demographic problem of higher pension and healthcare spending.
