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I consider this issue of considerable import as it represents another obligation that could very well wind up in the lap of US citizens; and another promise reneged.

Mark: Can't tell from your comments whether you deny there is a problem or just that you thought the article didn't present it very well but, here's a few other's not just the airlines, nor just publicly held corportations.

"Pensions that Bear Mention"

How public pension promises are draining state and city budgets"

As for one of the reasons why this occurred:

"40 companies sitting on pension time bombs"

Oddly, companies are allowed to include returns on pension investments in their net income -- even though they owe the money to retirees, and those returns are based on assumed rates of return of 8% to 12% that are far bigger than real market returns in many years.

Another interesting tidbit:

"While pensions fall short, CEOs fly high"

So I wouldn't be inclined to say that asset allocation per se is the sole culprit. But I'd think that a more market neutral investment strategy would make a lot of sense even if it meant going against the advice of money managers who have a vested interest in charging fees from purchasing equities when that is a high risk gamble.

A fiduciary duty was neglected. The relative safety (and suitability) of bonds was under-utilized. Perma-bullishness and Enron-style accounting became the norm and guess who is going to suffer the consequences...


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