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"The Pension Crisis Will Wipe Out All
Of Your Retirement Savings This Year"
by Epic Economist
"U.S. pension funds are about to implode and wipe out the retirement savings of millions of state and local government employees. A flood of new reports reveals that the nation’s pension system is severely underfunded and many private equity firms have lied to their customers about their true ability to pay retirees in 2023. The stock market meltdown is set to make conditions even more precarious, and about $4.1 trillion dollars in retirement funds are on the line. And the worst part is that the catastrophic collapse of U.S. pensions means that all taxpayers are going to be financially squeezed by even higher taxes in order to make up for such massive asset losses.
As it turns out, U.S. pension funds – usually known as the gold standard for retirement security – aren’t that safe at all. New reports show that our public pension system is facing serious challenges that are threatening the retirement plans of millions of American workers. Private equity firms typically use pension money to purchase and restructure companies with the intent to sell them off later on for a profit. However, between the processes of buying and selling, these firms do not provide transparent metrics for valuing the purchased asset. This means private equity businesses can literally manufacture a number to report to their clients, the pension investors.
New pieces of evidence reported by CNN, Reuters, and The Guardian show that these firms frequently inflate valuations when seeking new investments. In December, private equity businesses reported to pension officials that their assets were worth much more than they actually are today. And data just released by Reuters proves that all of these firms were skimming billions of dollars of fees off retirees’ money. Since 2019, the public pension system lost over $1.5 trillion, facing a 21% loss in 2020 alone. At the same time, these losses have added an overwhelming amount of stress on our public pension systems, and now state and local pensions are already facing a $4.1 trillion shortfall.
Official data shows that the 100 largest public pension funds in the United States had been funded at just 78.6% of their total obligations at the close of the last quarter. Between December 2022 and February 2023, a whopping $220 billion was lost due to the tech bubble burst. And while pensioners are at risk, Wall Street’s pension fund managers are protected thanks to their heads-we-win-tails-you-lose business model, says Sirota. While reporting asset losses for investors, some of the firms managing pensioners’ money are raking in even more fees from investors and continuing to raise executives’ pay.
In other words, they are legally stealing money from U.S. workers, and no one is doing anything about it. This money transfer from the retirement accounts of hard-working Americans to the pockets of rich Wall Street fund managers is scandalous and shameful. But still, nobody seems truly worried about the consequences this may pose to millions of state and local employees that are likely to spend their retirement years closer to poverty than they ever imagined.
In essence, the U.S. pension fund crisis is a reflection of America today, where corruption is legalized and it is the people who bear the brunt of the mistakes of our so-called leaders while they get exploited and outright robbed by a power-hungry elite that won’t be satisfied until they seize everything we have ever fought for."
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