Courtesy of Mish.
One of my constant themes over the past few years is the underfunding of state and local pension plans. Illinois is particularly bad, but let’s look at some aggregate data.
The National Association of State Retirement Administrators (NASRA) provides this grim-looking annual picture.
Annual Update
Between the end of 2007 and end of 2014, pension plan assets rose from $3.29 trillion to $3.71 trillion. That’s a total rise of 12.76%.
Plan assumptions are generally between 7.5% to 8.25% per year!
S&P 500 2007-12-31 to 2014-12-31
In the same timeframe, the S&P 500 rose from 1489.36 to 2058.90.
That’s a total gain of 590.54 points. Percentage wise that’s a total gain of 40.22%. It’s also an average gain of approximately 5.75% per year.
Analysis
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