The ageing population is putting pressure on this system. The growing number of retired people relative to those in work supporting state pension payments through their taxes has also led the government to consider speeding up the current timetable of pension age rises.
The largest pension plan in the country, CalPERS (California Public Employees Retirement System) expects to earn 6.2% over the next ten years and intends to lower its investment rate assumption to 6½% over time.
If the City were to earn 6.2%, its unfunded pension liability would soar to an estimated $20 billion, double the $9.6 billion (77% funded) as of June 30, 2016.
A U.S. judge should order Illinois to pay Medicaid providers about $1 billion a month to ensure medical care continues for the three million recipients of the health program after talks with the state reached an impasse, according to a court filing on Monday.
The move would cause a huge problem for the cash-strapped state, which has accumulated a $15 billion bill backlog due to a budget stalemate between its Republican governor and Democrats who control the legislature. It could force Illinois to stop making full payments on other state-mandated or court-ordered spending such as pensions and payroll.
Two expensive loans that Chicago Public Schools secured over the last week will cost roughly $70,000 a day in interest for the cash-strapped district under the terms of the deals.
CalPERS’ $325 billion investment fund, the largest public-employee pension fund in the country, has enough money to cover only about two-thirds of the benefits promised to retired public employees. The CalPERS board has steadily increased mandatory contribution rates for the state, cities, counties and school districts to make up for the shortfall. The state’s share of the unfunded liability is estimated to be $59 billion, with its minimum payment forecast to increase from $5.8 billion this year to $11.2 billion in 2031.
It’s an increasingly urgent question, as nearly a third of the inhabitants of the world’s most populous country will be over 60 years old by 2050, according to United Nations data. By 2015, the pension of each retired resident was borne by the contributions of fewer than three wage-earners, government estimates show.
The central bank owned 39.5 percent of Japan’s bonds and treasury bills, up from 13.1 percent when Haruhiko Kuroda took over as governor in March 2013, according to its quarterly Flow of Funds statistics released Tuesday.
Intesa Sanpaolo, a rival, bought the banks’ good assets for one euro, and was promised another 4.8 billion euros in state aid to deal with restructuring costs and bolster its capital ratio. Italy’s taxpayers get to keep the bad loans, which could end up costing them another 12 billion euros (though the government believes it will be much less).
Investors are valuing stocks these days at levels — measured by the S&P 500’s price-earnings ratio — that were higher only during the 1929 and 2000 market bubbles. But is today’s market also in a bubble?
Gold & Silver
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