Pension Crises Growing

Pension across the country are coming under pressure with their investment portfolios still counting on rates of return that seem less than likely to materialize over the next decade. Public pension, including state and local governments are especially stressed. With interest rates at record lows where are these pension funds going to gett a return without chasing ris, moving forward?

"California, which has the largest U.S. public-pension fund, faces liabilities that may exceed its annual state-tax revenue fivefold within two years unless lawmakers rein in benefits, according to a study.  To keep their promises to retirees, the California Public Employees Retirement System, the biggest plan, the California State Teachers Retirement System, the second-largest, and the University of California Retirement System may have combined liabilities of more than 5.5 times the state’s annual tax revenue by fiscal 2012, according to the study released today by the Milken Institute. Levies are forecast to reach about $89 billion in the year that began July 1."

There is more here for the inquiring mind.  If you have has income reduces and it has impacted your credit profile give the folks at Credit Repair Texas a call for a free evaluation.

States $3 trillion in Pension Obligation Debt

let's take a look

..........................Joshua Rauh, an economist at Northwestern University, and Robert Novy-Marx of the University of Chicago, recently recalculated the value of the 50 states’ pension obligations the way the bond markets value debt. They put the number at $5.17 trillion.

After the $1.94 trillion set aside in state pension funds was subtracted, there was a gap of $3.23 trillion — more than three times the amount the states owe their bondholders.

“When you see that, you recognize that states are in trouble even more than we recognize,” Mr. Rauh said.

With bond payments and pension contributions consuming big chunks of state budgets, Mr. Rauh said, some states were already falling behind on unsecured debts, like bills from vendors. “Those are debts, too,” he said.................

http://www.nytimes.com/2010/03/30/business/economy/30states.html?bl

State to lever up in risk exposure

let us take a look

__________________

Oregon may invest pension money in troubled-bank rescues

In a deal being pitched as a home-run investment opportunity for the state pension fund, Oregon's public pensioners may be about to buy stakes in several of the 700 troubled banks around the country that are wallowing in bad loans.

The deal's unusual structure and hefty fees raise concerns, particularly in light of the Oregon Investment Council's recent insistence that it would push for better terms, more transparency and better corporate governance from investment managers it does business with.

The transaction also provides a window into how Wall Street financiers are lining up to unwind the banking crisis that many helped create -- with high potential for another round of windfall profits for savvy investors.

The citizen's council that oversees the Oregon Public Employees Retirement Fund gave its approval last week -- subject to final fee negotiations -- to invest $100 million in a bank holding company being organized by Sageview Capital, whose partners bring deep experience in the world of leveraged buyouts.

http://www.oregonlive.com/business/index.ssf/2010/03/oregon_may_invest_pension_mone.html