Retirement Pensions Disapear - Now What?

According to an article in the April 27, 2009 Business Week magazine there has been a loss of $1.3 trillion from the investments of public pension funds. This affects the retirement security for 22 million teachers, firefighters, police officers, and their survivors. Now some fund managers believe that they have the answer in the government’s program to clean up toxic assets.

The article states that as of April 15^th the $175 billion California Public Employees’ Retirement System has decided to purchase the assets of Citigroup and other financial companies that are troubled. There is great interest in this idea and the meeting room was filled beyond capacity.

In my opinion these workers need to compensated, most have worked all of their lives to have a comfortable retirement only to find out that they now have nothing or close to it. What about those who are too old to continue working and now have nothing to live on, what are they supposed to do? The banks were badly hurt by the number of consumer and commercial mortgage foreclosure, the few banks that did not involve themselves in these types of mortgages and had a special servicer in place are in much stronger positions, they still have money to lend, and their members are still enjoying healthy dividends on their accounts. For the most part the only banks that have this strong position are the credit unions, these are the best banks to belong to in all markets, but especially during these economic times because at least you know that they will still be there the next day – can you honestly say that about consumer banks? The fact is that the money disappeared very quickly and the plan in place will take years to repair the damage cause over the last 18 months.

The only thing that we can do now is wait and see.

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