The Wall Street Journal reported last week on the latest investment returns for public pensions like Mississippi’s PERS. It has a good explanation of why governments aren’t doing anything about the growing PERS crisis:
But government officials seeking to make their investment targets more conservative have a powerful disincentive: Assumptions of high returns appeal to elected leaders because they reduce the amount governments need to set aside to cover pension promises.
It also notes the risks in current investments:
“They’re taking a lot [of] risk in their plans with high allocations to equity and other return-seeking assets,” said Ed Bartholomew, a consultant. “Someone is bearing that risk, and the question should always be ‘who is bearing that risk?’ ”
The answer is: everyone.
If PERS implodes, this will affect us all.