The Trouble with Pensions: Toward an Alternative Public Policy to Support Retirement
Pension funds have taken a big hit during the current financial crisis, with losses in the trillions of dollars. In addition, both private and public pensions are experiencing significant funding shortfalls, as is the government-run Pension Benefit Guaranty Corporation, which insures the defined-benefit pension plans of private American companies. Yeva Nersisyan and Senior Scholar L. Randall Wray argue that the employment-based pension system is highly problematic, since the strategy for managing pension funds leads to excessive cost and risk in an effort to achieve above-average returns. The average fund manager, however, will only achieve the risk-free return. The authors therefore advocate expanding Social Security and encouraging private and public pensions to invest only in safe (risk-free) Treasury bonds--which, on average, will beat the net returns on risky assets.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dimitri B. Papadimitriou & L. Randall Wray, 1999.
"Minsky's Analysis of Financial Capitalism,"
Economics Working Paper Archive
wp_275, Levy Economics Institute.
- Dimitri B. Papadimitriou & L. Randall Wray, 2000. "Minsky's Analysis of Financial Capitalism," Macroeconomics 0004022, EconWPA.
- L. Randall Wray, 2008. "The Commodities Market Bubble: Money Manager Capitalism and the Financialization of Commodities," Economics Public Policy Brief Archive ppb_96, Levy Economics Institute. Full references (including those not matched with items on IDEAS)