Wednesday, 27 May 2015
Last updated 8 hours ago
Apr 16 2014 | 9:48am ET
American public pension funds are in bigger trouble than widely thought, according to the world's largest hedge-fund manager.
Bridgewater Associates said it has crunched the numbers, and that there's an 80% chance that public pensions will go bust within 50 years. In 20% of the scenarios tested by Bridgewater's "stress-test" model, they'll run out of money in just 20 years.
Bridgewater notes that public pensions have some $3 trillion in assets and $10 trillion in future liabilities. That means they need to return at least 9% a year to ensure that they can pay those obligations.
Unfortunately, the most optimistic of predictions have pensions earning just 7% to 8% per year, which would lead to a 20% shortfall. And Bridgewater believes those predictions are optimistic, indeed.
The hedge fund said it is more likely that public pensions will earn just 4% annually. That would see 85% of U.S. public pensions go bankrupt in the next 30 years.
Mar 20 2015 | 12:45pm ET
StreetWise Partners, a non-profit organization that works with low-income individuals to help them overcome employment barriers, raised over $275,000 at the 2015 Raising the Ante Charity Poker Tournament and Casino Event last Wednesday evening at Capitale. Here are some photos from the event. Read more…