Again and again it bears repeating — conservatives have no excuse for losing the information war when the facts are overwhelmingly on our side. Here is Steven Malanga writing at the Manhattan Institute:
When financial markets slumped in 2008, the assets in government-worker pension funds plunged and public sector retirement debt soared. Although pension officials rushed to assure the public that their funds would recover as soon as stocks rebounded, the long bull market that began the following year didn’t do much to cut states steep retirement debt.
Now, 18 months of mediocre investment returns have sent the unfunded liabilities of state and local pension funds soaring to unprecedented levels and have raised new questions about whether some of these traditional retirement plans supported by tax dollars are sustainable.
Most state and local pension funds closed the books on their latest fiscal year on June 30, and during that 12-month period the bellwether Standard & Poor’s 500 increased by less than half a percentage point. While many funds have yet to report their results for the year, early returns suggest that the industry fell well short of its lofty investment goals.
The nation’s largest pension fund, the California Public Employees’ Retirement System, earned a mere 0.6% in the last year, significantly below its 7.5% target. Its sister fund, the California State Teachers Retirement system, which also aims for a 7.5% annual return, instead notched a 1.4% gain for the year.
The New York State and Local Retirement System, which ended its fiscal year on March 31, reported a gain of just 0.2% versus an investment goal of 7%. It’s likely that other pension funds have similarly failed by a wide margin to hit their investment targets given that most government pension funds rarely perform significantly better than the broader market.
Read more: The Manhattan Institute
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