Study Of 10-Year State Pension Returns Highlight Full Extent Of Public Pension Ponzi
by Tyler Durden
ZeroHedge.com
Oct 4, 2017
A new study of public pension returns by Cliffwater LLC has found that the median U.S. state pension plan returned just 5.9% annually over the 10 years ended June 30, 2016. Meanwhile, as Pension and Investments notes, the top performing state pension, the $15.6 billion Oklahoma Teachers’ Retirement System, was the only fund that managed to eek out a return over 7% during the same period.
U.S. state pension plans returned a median annualized 5.9% for the 10 years ended June 30, 2016, vs. 6.8% for the 10 years ended June 30, 2015, said Cliffwater’s most recent annual state pension performance report.
The average 5.7% return for the 10 years ended June 30, 2016, fell within a wide range of individual pension plan returns (3.7% to 7.1%).
Once again, the two top-performing state pension plans for the period were the $15.6 billion Oklahoma Teachers’ Retirement System, returning 7.1%, and the South Dakota Investment Council returning 6.8% for the $10.5 billion South Dakota Retirement System. In third place was the $7 billion Missouri Local Government Employees Retirement System, returning 6.7%. All returns cited are annualized figures.
Of course, as we’ve noted on numerous occasions, the problem with those returns is that most public pensions in the U.S. have randomly decided to assume a long-term return of 7.5%, or 1.6% higher than what they’ve actually been able to achieve in practice. All of which only serves to mask the true scale of the pension crisis in the U.S. by discounting future liabilities at an artificially high rate.
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