November 25, 2022 | Pension Deficits Growing and Widely Understated

I have been writing for years about the train wreck unfolding in pension funds and individual retirement accounts that have migrated towards riskier holdings, leverage, “alternative,” and private equity allocations over the last 12 years of ultra-loose financial conditions. Needless to say, the cost of all this is not yet “marked to market.”

The segment below explains the conflicts of interest that have driven similarly destructive allocations around the world.

Like the United States, the United Kingdom, Japan, Italy, Germany and many other countries around the world are all in concerning condition when it comes to the solvency of their pension funds.

The recent book, How To Steal A Lot of Money Legally authored by Ted Siedle was written to give guidance, resources, and tools for today’s pension stakeholders & society so that they can take action… and stop the looting.

Ted is a former SEC attorney. His firm, Benchmark Financial Services, Inc. has pioneered over $1 trillion in forensic investigations of the money management industry. He’s nationally recognized as an authority on pensions and investment management matters, having testified before the Senate Banking Committee regarding fund scandals and is an expert in various Madoff-related and other litigations.

In 2017, he secured the largest SEC whistleblower award in history of $48 million, and in 2018, the largest CFTC award in history at $30 million. Here is a direct video link.  

As I wrote in 2016:

It is not that pension plans cannot be managed to support a long and civilized retirement for the masses. They can and, personally, I think they should. We are all headed toward old age, getting there with some financial security (shelter, health care, no debt and a comfortable income) is surely a worthwhile goal for individuals, their families, and society as a whole. But this requires adult discussions and ‘giving’ in the form of increased savings and reduced consumption in the present in order to ‘get’ a sustainable retirement income (and consumption) in the future.

Over the past 30 years of wanting it all today, ‘give to get’ has been an unpopular model. Unless and until, we restructure pension/savings plans–by increasing contributions in line with future withdrawal targets, lowering risk and return expectations, cutting fees extracted by finance, and in most cases, extending retirement ages toward 70–the holes in the future income bucket will not be filed, and rude awakenings for pension hopefuls and taxpayers will be plentiful. The later in life that financial disappointments hit, the harder they are to recover and repair from. In this regard, we are all running out of time. We must make wiser, more pragmatic choices, starting right now.

Danielle Park November 25th, 2022

Posted In: Juggling Dynamite

Next: This Week in Money »