The Phaserl


Here Come Pension Fund Benefit Cuts

by Dave Kranzler, Investment Research Dynamics:

Talk to anyone who is involved in the management of a pension fund and they will tell you the unspoken horror is that every pension fund in the country is underfunded – most of them horrifically underfunded.

A large Teamsters pension fund – 407,000 beneficiaries – just received notice that benefit cuts are coming  because the fund has to financially reorganize:  Teamsters Pension Fund Cuts

For decades corporations have been underfunding their true future benefit obligations as a means of manipulating GAAP net income for the purpose of maximizing upper management net income-based performance compensation.


There will be a wave of this coming.  Many large pension funds admit to being underfunded by 30-50%.  But these valuation assessments include an unrealistically high long term ROR assumption of 7.5% (some even higher).  Plus every pension fund invested in illiquid alternative assets like private equity deals is more than likely marked too high on the value of those investments.

When the Fed finally loses its ability to keep interest rates artificially low and a safety net under the stock market, most pension funds in this country will be wiped out.


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1 comment to Here Come Pension Fund Benefit Cuts

  • Craig escaped from Detroit

    Those of us who have been awake for a period of time, we know and see this situation is coming.
    Pensions (those lucky enough to get anything at all), will see either a total collapse/bankruptcy of their pensions, and only the LUCKY ones will receive a portion of their retirement.

    I’d say, the Lucky ones will take only a 60% pay cut. Most will lose everything.

    That’s why we are uh stackin’ and uh storin’, uh hoardin’ and uh growin’. We are expecting to protect ourselves and feed ourselves.

    Those sheeple who don’t see it coming and not doing as WE are doing? Those who don’t die in the 1st year? Well, it’s gonna be GOOD to be the KING of silver in this little town.

    Likely I’ll just keep a VERY LOW profile, but if I wished, I could be running the entire county or three. Hahaha. That might be a bit “optimistic”, but I sure sleep a lot better at night, knowing I’ve got food, water, acres, ammo & silver.

    On the ironic side, I am sure that a LOT of “WalMart Heffers & Moose-Butt-Men” will survive for up to a year, just on the FAT of their huge, obese bodies. Scares me just to think about it.

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