From the Financial Times:
Public pension funds in US states are facing their worst year of losses in history, exacerbating existing funding shortfalls and putting pressure on state governments to shore them up.
In the nine months to the end of September, the average state pension fund lost 14.8 per cent, according to Northern Trust, a fund company. The loss has grown since, as financial markets slumped further in October. The previous highest loss for state funds was 7.9 per cent for the full year in 2002.
In labor-tastic blue states like my native California, public pension funds are the mother of all delayed gratifications, with today's union-label politicians making all tomorrow's promises of money that probably won't be there. And, as mentioned yesterday, the larger of these funds are subject to constant pressure to make the world a better place, rather than make investors grow their money at maximal rates.
[Link via David Frum.]