News headlines are reporting daily on a pension crisis unfolding in the US. To understand how we got here, there are five major factors that led us to this point:
Generous payouts Inadequate contributions Low interest rates Longer life spans Overly optimistic return assumptions Lawrence McQuillan detailed how all of these are converging together in one hot mess for America’s largest and most underfunded state when he wrote his must-read book, California Dreaming: Lessons on How to Resolve America’s Public Pension Crisis.
As he said to us at the time, during a book interview with FS Insider, the money just isn’t there and now politicians are ‘scrambling’:
This post was published at FinancialSense on 06/23/2017.