FBI Asking Questions After a Pension Fund Aimed High and Fell Short

https://www.nytimes.com/2021/05/11/business/dealbook/psers-pennsylvania-fund-fbi.html

by seibelj • 5 years ago

2 2 5 years ago

seibelj• 5 years ago

The pensions of state workers are often funded through the mysterious maze of the state budget, so their rising cost is hard to see. But teachers’ pensions in Pennsylvania are funded through local property taxes, so when the fund needed more money, homeowners felt the bite.
Taxpayer contributions to the teachers’ pension fund nearly quintupled from 2001 to 2008, causing an outcry. Then came the financial crisis of 2008, and seven years’ worth of taxpayer pain came to naught. The fund emerged from the Great Recession with even less money than it had in 2001, the year of the big miscalculation.

Nothing to see here - just a “mysterious maze” of where taxpayer money flows. Who could possibly understand it?

mmmrk• 5 years ago

Pennsylvanians have been complaining about teachers’ pension costs since 2001, when state lawmakers sweetened all state workers’ pensions — including their own — on the thinking that the bull market of the 1990s would continue indefinitely. That mistake was laid bare a few months later when Wall Street and the economy dived after the terror attacks of Sept. 11. But lawmakers said the pension boosts couldn’t be reversed.

This is so weird. Did they mean to say they didn't want to reverse them? It's been 20 years now.

Anyway, I do not understand how defined benefit schemes can operate in either public or private markets. They are unpredictable and the result is this article...

FBI Asking Questions After a Pension Fund Aimed High and Fell Short

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