Pension funds in general are having a tough time, due to a slack economy. Municipalities, have it tough only if, the pension fund is unfunded. When zero free interest loans are made from a municipal pension fund to, the municipality, the amount given, no longer earns interest from being invested and, zero interest, gains, goose eggs, on the other end. Yes, they “help” the municipality. Layoffs always threatened. Reductions in starting salaries and number of years to top pay increased. Bottom line remains, there is no free lunch. There is magic bullet. Wagons roll on their own wheels. People must work and pay taxes because, when welfare tips the reasonable line where insufficient tax revenues are generated, the house of cards, will soon collapse.
When a pension fund with legislated rates of pay out operates in a negative interest environment, its fund is bound to be depleted.
You have to ask how can it have money to pay out at the legislated (high positive) rates. It can only do that if it is injected with goverment printed fiat money or if it has an ever expanding number of subscribers (a type of Ponzi scheme).
The stop on payouts byDallas police fire pension board isno surprise. It is only the tip of the iceberg.
In general, negative interest rates have revealed the unsustainability of many pension plans with legislated rates of payout.
Dallas police fire pension board ends run, bank stops 154m withdrawals.