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SteveD: The bond rating agencies do not aggregate all the pensions together and take an average of the unfunded liabilities. Even if they did, you would not be very happy -- because the one pension that is bad is a real basket case and would drag all the other pensions down "below the line" that the bond rating agencies use to measure the risk of failure.

The 19% return for a single quarter is not a good sign. The 30 year fixed income yield is running at about 0.75% per quarter. That would mean that the actual return on the equity side would be significantly higher than 19% -- perhaps as much as 37% -- for a single quarter -- if the pension is invested half in fixed income assets and half in equities. Most people understand that a 37% gain in a portfolio for a quarter or 12% per month puts the asset into a very risky category.

By the way, putting sandbags next to the sewer plant is not a bad idea. Rhode Island Airport Corporation is pushing itself to the front of the line when it comes to waste water facility upgrades leaving the Sewer Authority competing for funds to fix the levee. It may be many years before the sewer authority has the borrowing capacity to fix the levee. Sandbags could at least even off the levee so that waters do not simply enter the plant through the low spot in the levee.

The levee is kind of like the Warwick Fire I pension: a certain to fail risk during the study period (30 years). Thanks for bringing it up.

From: Mayors find proposal for municipal pensions, 'all stick, no carrot'

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