Sort of discussed in the previous old AO mega-thread.
But now the bill has come due.
France first. UK soon to follow.
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Exacerbated by the early retirement age. Additionally, France (along with Austria) had the strongest baby boom in Europe and virtually all baby boomers have reached retirement age
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I hadnāt checked in on US public pension funding levels for a while and this thread inspired me to check in. My SWAG was that they significantly improved due to the stock market performance. They did improve a lot, but not quite as much as I would have guessed.
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Canadaās provincial and municipal public pension plans are almost universally funded at over 100% on a going concern basis. Federal public service plans may be a tad under 100%.
More importantly, our earnings-related social security plan (CPP) is fully funded on a steady state basis. This is a huge contrast to US and European counterparts.
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Fascinating
What lessons can the rest of the world can learn from Canadian pension fund managers?
Might be time to fire them and just stick to good ole index investing
Maybe Cook will recall better than me but I think at one time CPP was not properly funded, and an actuary got fired or quit. IM fuzzy on the details.
Youāre thinking of Bernard Dussault. His firing is mentioned at the link. He did nothing wrong.
His is too long a story to relate here and there is no public document to link to. I did a professional standards session years ago about his confrontation with Paul Martin but no longer have the slides.
https://www.cbc.ca/news/canada/ottawa-fires-cpp-number-cruncher-1.162854
Might be time for US social security funds to be invested this way rather than how they are currently. Although this may be academic if OASDI funding is not beefed up to a sustainable level.
Oh yeah, thatās the way it went down:
An actuary basically said āhereās what we need to do to make this pension liveā. Andā¦gets fired. yeah, Iām recalling now. I just remembered there was something a bit fishy about it.
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And the pension plan was and maybe is still, invested in at least one life insurance company and a toll road.
Donāt get me started on the toll road. I go on and on.
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The CIA thought it was fishy as well but Dussault was just acting professionally. He was under political pressure to produce a better number and he refused to.
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I think that time has passed.
The actuaries expect the SS trust fund at the end of 2025 to be enough to fund 1.7 years of benefits. And, of course, that ratio is going down.
Uhhhhh gonna need to see a source for this one
Pretty predictable source: āActuarial Estimatesā Table IV A3 here: https://www.ssa.gov/OACT/TR/2025/IV_A_SRest.html#382302
I see I made a mistake. I described the 1.7 as the end of 2025. The accurate 1.69 is the start of 2025. The estimated end value is 1.49.
Invest in the US economy.
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Uhhhh what are you talking about
Even in the illustrated high cost scenario the reserves are not depleted until after 2031
I assume you are not American
Iām talking about the number in the far right hand column in the row labeled ā2025ā under the word āIntermediateā. What do you think that number means?
I think I see the problem. I wrote āThe actuaries expect the SS trust fund at the end of 2025 to be enough to fund 1.7 years of benefits.ā That means the trust fund is 1.7 times one year of benefits. If no new taxes came in, benefits would end in less than 2 years.
You thought I meant āThe trust fund, together with future taxes, will run out in 1.7 yearsā. I understand why you would mentally added that because the trust fund expiry date makes headlines. But, itās not what I wrote.
The point is that the trust fund is too small for a change in investment return at this late date to have a meaningful impact on SS long term financing. Any money used for investing in private equities would need to come from increased taxes.
So not American?
Are you a credentialed actuary?
Anyways this is the same non-issue issue that has been pushed on us for as long as I have been alive
I really donāt know how to reply rationally to that kind of post.
I have no idea what you mean by ānon-issue that has been pushed on us ā¦ā so I donāt know where to start.
Just answer honestly