We have taken a deep interest in the pension problems of both companies and governments. We are far more concerned about the pension plans of governments as they so huge and suffer from massive under fundedness. There is plenty of blame to go around, but in the end, it is the government that designed and ran these plans. We put the blame for this problem right on the doorstep of politicians who over promised without any intention of putting money aside to pay those costs as they come due down the line. (Promise to give government employees big pension, including themselves, to ensure a block of reliable voters.) The other big culprit in this disaster in the Federal Reserve. Zero interest rate policies have made the return on bond portfolios extremely low. The yields are far lower than the plan managers assumed, so the pension plans fall further behind every year. We talk about this phenomenon in an article published last week entitled "What Will Cause the Next Recession & Bear Market?"
