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Ask Cadence: Is there any truth to the talk of a “looming pension crisis”?

By Blog

Simply put – yes. Most pensions are still calculating their benefits assuming a 7%+ long-term rate of growth. Looking back at the last 30 years of market returns, that doesn’t seem so far-fetched, but unfortunately a pension fund’s ability to deliver on promised benefits is all about what it will in fact earn going forward over the next 10, 20, and 30 years. Here are the hard facts about current and likely future returns: Interest rates on bonds and credit investments are near or at historic lows. The highest quality government bonds pay under 2% and highly-rated corporate bonds don’t…

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