The Motley Fool Discussion Boards
Investment Analysis Clubs / Macro Economic Trends and Risks
|Subject: Re: Proposal to end public pensions||Date: 7/11/2013 10:44 AM|
|Author: JLC||Number: 428477 of 501078|
I suppose they could, but I am not sure how many do that. Virginia was using an overly optimistic 7% discount rate whereas Moody's recommended they use a 5.5% projection, which is closer to realistic in my view.
I'm definitely conservative in my projections, I'm counting on 4-5%.
I don't know if that is a straw man or not. I only know that my wife's pension is not predicated on such an assumption in the first place.
Not intended to be a strawman. Here is the first hit on Google, need to scroll to the last page to get specific pension assumed returns. The lowest I saw was 7%. The median seemed to be about 8%. Way too high still, IMHO. But the higher the projection, the less money you have to commit, thus making it easier to "balance" the budget.
I do recall reading a WSJ article a couple years ago here some pensions in California and Illinois were assuming a 12% return at that time.
Here is a decent review from a year ago about how bad things actually are. With one person calling for using 6% as their projection return.
|Copyright 1996-2016 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us|