That article is based on results for 2011 where returns were low single digits, however returns in 2012 were back up in double digits and helped reduce pension plan liabilities. I don't know all of them but I do know of several large plans that reduced their liabilities by billions, ie. teachers plan, OMERS, HOOP, etc... Don't know about single employer plans though.The evidence is much clearer and closer to home. Take a look at the balance sheet and pension disclosure note of your favourite companies. Odds are, they have a ginormous pension liability.
http://www.canoe.ca/Canoe/Money/News/2012/10/05/20263196.html
Pension funding and valuation is based on long-term assumptions.That article is based on results for 2011 where returns were low single digits, however returns in 2012 were back up in double digits and helped reduce pension plan liabilities. I don't know all of them but I do know of several large plans that reduced their liabilities by billions, ie. teachers plan, OMERS, HOOP, etc... Don't know about single employer plans though.
Hi, it's 1970 calling. We'd like to bring unions back, too.If everybody keeps buying German korean and japanese cars there will be no pensions in the near future.
My view is you have this backwards. Institutional investors are supposed to be smart, sophisticated professionals. The pensions they managed REQUIRED 8% returns because of the promises made by pension trustees and actuaries. Therefore Wall Street and Bay Street created financial products to meet the demand that risk profile created. Turns out both sides, buyer and seller, were stupid because both failed to predict what a down market would do to the value of these securities. Real investors took the mark to market valuation hit.Many of these Pension Funds got stuck with bogus mortgaged backed securities. Securities that they were told were AAA rated and were in fact junk. The reality is that these pension funds have to have been earning the real rate of inflation plus a % to cover costs of management. Now many are stuck with junk bonds that were sold to them fraudulently. Until people wake up and understand what is really going on, we're screwed.
Perhaps this will eventually lead us back to real money and a production based economy rather than an economy based on debt and consumer spending.
BS
As of 2011, 1.5 to 1. Holy crap!Picking on teachers again, does anyone know the ratio of retired to active teachers in Ontario?
It's 1 retired to every 1.5 working. You kind of had it backwards.As of 2011, 1.5 to 1. Holy crap!
http://www.otpp.com/members/pension-news-online/articles/article/-/article/35873
Thanks. I knew it was high but even I am shocked. How long before 1:1?As of 2011, 1.5 to 1. Holy crap!
http://www.otpp.com/members/pension-news-online/articles/article/-/article/35873
The problem with the teachers plan is, if it can't make enough to support it self,...you and I will have to help them out,...makes me feel all warm and fuzzy inside.Thanks. I knew it was high but even I am shocked. How long before 1:1?
Sorry, I was quoting from the article, which was working to retired ratio.It's 1 retired to every 1.5 working. You kind of had it backwards.
I couldn't have said it better myself.The problem with the teachers plan is, if it can't make enough to support it self,...you and I will have to help them out,...makes me feel all warm and fuzzy inside.
FAST
Sorry, I was quoting from the article, which was working to retired ratio.
But seriously, does it make anyone feel better?
p.s., this is not a OTPP-specific issue. It's a Canadian issue. The CPP is in a similar boat.
when is that going to happen? I've been waiting for increased interest rates for some time. I now hear reports that rates will stay low for several more years.sure they will all try incremental fixes, little tweaks here and there, BUT i don't think that will get them home and able to fulfill their promises. At some stage there are likely going to have to be real cuts. But there is no political will , yet. Its starting in places, of all places, like the Netherlands.
The squeeze is coming on both sides now .... retirees who built there lives around these defined pension promises .... and under 30s who cant find good jobs - and may even have debt, which are gonna get interesting to service when interest rates go up.
The issue that I see with CPP is that the government will just jack up the rates again and probably remove the "opt-out" provision for those over 65 (I think it's 65...) who are still working because they have to.
