March 10, 2010 Public pension investments becoming more risky?
A number of public pension plans are shifting their investments…to more risky investments. Many private companies are becoming more safe with their investments, but many state governments are investing in more hedge funds or investing a higher percentage of assets in the stock market. Why? It is a double down strategy to gain back the large amounts lost in returns in 2008. States do not have enough money in their pensions to meet liabilities and the strategy is to play catch-up. Many of these states are assuming a 9.5% annual investment return on their stocks (good luck).