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Nobel laureate economist William F. Sharpe, creator of the Sharpe ratio for risk-adjusted investment performance analysis, said public pensions in the United States are a “disaster” and “a crisis of epic proportions.”

“Idiotic accounting drives even worse economic decisions,” he contended. “This is the classic case of an organization that borrowed money while issuing purportedly guaranteed payments and then used the money to invest in risky securities. Where have we heard recently that this is not a good thing?”

Comment: The day to “act quickly” long passed in Illinois. Denial, delay, extending and pretending have prevailed.

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J.A. Herzrent
Teamsters will get their pensions reduced. Greek government workers will get their pay and pensions reduced. Any private sector retiree whose company terminates a defined benefit plan gets his/her pension reduced if it exceeds the maximum insurance amount (and by the way, PBGC has substantially greater liabilities than assets). What is so hard to understand about “unsustainable?” I’m quite sure that no constitutional amendment at the state level could reduce benefits already earned. If anything is a “contract right” it’s the pension of someone who has done his time and retired. The way to reduce those pensions is to stop putting money into the leaking bucket. Eventually… Read more »
Step 1 would be to amend the state Constitutions in CALIF and ILL, so that govt ees and retirees would have their pensions reduced. Yes, reduced. In Chi-town the 5 major govt ee pension plans have 95,000 retirees getting monthly pensions. If the assets earn 7.5% the Liab is $34B, if assets earn 5.5% it’s $44B……….assets are only $21B. The situation is clearly hopeless if the current retirees are this much unfunded. This means there is ZERO available for current actives, if it’s first earmarked for retirees and they’re only 50% funded. Andrew and Advocate, are you out there? You haven’t responded to Mark and me from… Read more »