Please see: Mass. Pension Fund Goes Pfffft! and The Massachusetts Piggy-Bank.
"Public pensions eyeing hedge funds; Riskier investment seen by some managers as way to make up losses" by Bloomberg News | August 15, 2008
Or LOSE MORE of YOUR MONEY, taxpayers!!!
NEW YORK - Public pension funds are increasing bets on high-risk hedge funds and real estate in an attempt to fill deficits in retirement plans and make up for their worst performance in six years.
In reaching for high returns while diversifying their assets, managers may be putting taxpayer money at risk.Hey, it is NOT THEIR MONEY (although they think it is)!!!!
Alternative investments include private equity, hedge funds, real estate, and commodities. That category is expanding to include timber and infrastructure. While states and local pension plans have invested in alternative assets for more than a decade, the trend is accelerating as returns on stocks and bonds sag.
"The last couple of years have not been particularly good for equity markets, and plan sponsors are looking for ways to make up the difference," said Kurt Winkelmann, the head of global investment strategy at Goldman Sachs Asset Management.
Public pension funds are already overestimating their future performance, according to a survey of 147 retirement systems by Greenwich Associates. The Greenwich, Conn., consulting firm found in April that fund managers forecast outperforming market benchmarks by 1.46 percentage points over the next five years, an outcome it called unlikely.
Yeah, it helps when you can fiddle with numbers to make it look any way you want.
States owe about $2.35 trillion in pension payments over the next 30 years, the Pew Center on the States said in a December report. Based on 2006 figures, the funds were short about $361 billion.
That's about HALF of what we have spent on Iraq, isn't it?
--more--"
