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This is a perfect example of the problem with many Pension Plans. The Plan assumes a growth rate of perhaps 8%, but the real growth rate is far less than that assumption.
Mish's Global Economic Trend Analysis: Calpers Pension Plan Reports 1% Return; Stunning "What If" Charts at Various Compound Annualized Rates-of-Return Going Forward
The other challenge with some Pension Plans is that they are significantly underfunded, and the company has a huge IOU that it may never be able to pay to the Plan.
Peter
Mish's Global Economic Trend Analysis: Calpers Pension Plan Reports 1% Return; Stunning "What If" Charts at Various Compound Annualized Rates-of-Return Going Forward
The other challenge with some Pension Plans is that they are significantly underfunded, and the company has a huge IOU that it may never be able to pay to the Plan.
Peter