Trillion Dollar State Pension Gap.... Not Surprising at All

The Pew Center came out with their report on State pensions and found that the entire nation has approximately a TRILLION DOLLAR gap.

Why is this happening? Oh I'll just skip straight to the point so you don't have to waste your time reading this lengthy report: UNREALISTIC ASSUMPTIONS!

Most of the states with the biggest shortfalls are the ones with 8% or greater investment return assumptions. I don't know who is managing their money but the market's long term average sits right around 7% so their underlying assumption is that they are going to consistently beat the market by a FULL PERCENTAGE POINT every year. That kind of positive alpha would be legendary (ala George Soros). It is just amazing how inept our governments are. I blame the academics. They are the ones who are using these unrealistic principals and assumptions and because they went to some fancy school the states take their word for gospel. This just adds to how profoundly annoying and hopeless our government system is.

Shame on you states and your 8% or greater return assumptions.