Realistically, this gamestop event is a VERY SMALL problem when it comes to pension plans.
They are continuously underfunded, requiring the promise of huge returns to pay out beneficiaries when the time comes. The huge returns are, obviously, unlikely to happen. More specifically, the returns they need to produce over a market cycles are more than the return of any asset class that exists. Let alone the need to diversify risk away from single asset classes and then you can see that it's impossible to produce these large returns.
They've been employing this scheme for a while now. The way they maintain it is that every few years they reassess their investments and decide that the huge return they need to achieve increases even more.
Quite honestly, the same problem occurs with foundations and endowments, and even insurance companies. Pension plans are just the largest in terms of volume right now.
Source: work in the industry and seen these fuckers keep pulling these schemes. I am not targeted directly by this gamestop situation, but if I ever lose my job to a scenario like this, I'd smile that a bunch of little guys stuck it to a corrupt industry.
Sometimes your names aren't green with the [M] after it. If you look at your user page you should notice it too. I can send you a picture if you don't see it.
Realistically, this gamestop event is a VERY SMALL problem when it comes to pension plans.
They are continuously underfunded, requiring the promise of huge returns to pay out beneficiaries when the time comes. The huge returns are, obviously, unlikely to happen. More specifically, the returns they need to produce over a market cycles are more than the return of any asset class that exists. Let alone the need to diversify risk away from single asset classes and then you can see that it's impossible to produce these large returns.
They've been employing this scheme for a while now. The way they maintain it is that every few years they reassess their investments and decide that the huge return they need to achieve increases even more.
Quite honestly, the same problem occurs with foundations and endowments, and even insurance companies. Pension plans are just the largest in terms of volume right now.
Source: work in the industry and seen these fuckers keep pulling these schemes. I am not targeted directly by this gamestop situation, but if I ever lose my job to a scenario like this, I'd smile that a bunch of little guys stuck it to a corrupt industry.