Perfect Storm Rocks State, City Pension Funds

While this week’s stock market rally back into bull territory again is indeed good news, it’s small consolation to state, city pension funds that have posted their worst year since 2009 … Grandma & Pa ain’t happy either …

Or, so reports the WSJ. It was the perfect storm as “simultaneous declines in stocks and bonds hammer the funds in the year ended in June.” In other words, it almost didn’t matter what Wall Street vehicles they invested in, the losses irrepressibly mounted. In fact, “public pension plans lost a median 7.9%.”

Moreover, the market blood bath for the funds not only naturally added to “pressure on government finances” but was a “fresh sign of the chronic financial stress facing” retirement savers as well. Some may have to delay their retirements or not retire at all. For the state and local governments around the country, “the losses will mean higher annual retirement contributions in coming years, forcing many public officials to raise taxes or other revenues or to cut services.”

Davd Soul