{"id":1045021,"date":"2021-11-22T16:44:58","date_gmt":"2021-11-22T21:44:58","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1045021"},"modified":"2021-11-22T16:45:03","modified_gmt":"2021-11-22T21:45:03","slug":"public-pensions-face-liquidity-challenges-thanks-to-inflation-more-retirees","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/public-pensions-face-liquidity-challenges-thanks-to-inflation-more-retirees\/","title":{"rendered":"Public Pensions Face Liquidity Challenges Thanks To Inflation, More Retirees"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">20<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fpublic-pensions-face-liquidity-challenges-thanks-to-inflation-more-retirees%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1045021&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>Amid higher inflation and more retirements, public pensions are strapped for cash.<\/p>\n<p>Since COVID-19 and the lockdown-induced recession, the inflation rate has <a href=\"https:\/\/www.dailywire.com\/news\/manchin-warns-about-record-inflation-inflation-tax-is-real\">risen<\/a> to 6.2% \u2014 the highest level since 1990. Meanwhile, more Americans are retiring \u2014 contributing to the labor force participation rate <a href=\"https:\/\/fred.stlouisfed.org\/series\/CIVPART\/\">reaching<\/a> its lowest level since the 1970s.<\/p>\n<p>According to a report from <a href=\"https:\/\/www.wsj.com\/articles\/pension-cash-dwindles-risking-liquidity-crunch-11637537168?mod=hp_lead_pos1\">The Wall Street Journal<\/a>, both trends are pushing pension funds to take steps that ensure their continued liquidity:<\/p>\n<p>Cash allocations have dropped to a seven-year low at the funds that manage more than $4.5 trillion in retirement savings for America\u2019s teachers, police and firefighters. Public pension funds, which have increasingly turned to illiquid private markets to drive up returns, are now aiming to keep about 0.8% of their holdings in cash, according to data from the Boston College Center for Retirement Research. These funds are managing a juggling act faced by many institutional and household investors who want to put their money to work but also want easy access to it in a pinch.<\/p>\n<p>The Journal adds that retirements may be poised to surge further:<\/p>\n<p>Public pension funds have hundreds of billions of dollars less on hand than the amount they will need to cover promised benefits after two decades of underfunding, unrealistic demands from public-employee unions, and losses during the 2007-2009 financial crisis.<\/p>\n<p>Over the same period, their cash-flow margins have thinned as retirees have multiplied relative to the number of current workers. In Connecticut, for example, more than a quarter of the state workforce are eligible to retire between June 2020 and June 2022, Boston Consulting Group found.<\/p>\n<p>The average public pension fund wants to keep 0.8% of holdings in cash.<\/p>\n<p>Many economists point to higher amounts of federal education, healthcare, and unemployment aid as a contributing factor to labor shortages. Congress has funded nearly $5 trillion in stimulus spending since March 2020; meanwhile, President Biden recently <a href=\"https:\/\/www.dailywire.com\/news\/joe-biden-signs-1-2-trillion-infrastructure-bill-calls-it-truly-historic\">signed<\/a> a $1.2 infrastructure package, and lawmakers are <a href=\"https:\/\/www.dailywire.com\/news\/biden-economic-adviser-suggests-passing-1-75-trillion-bill-would-help-solve-effects-of-inflation\">considering<\/a> a $1.75 trillion social spending package entitled the \u201cBuild Back Better Act.\u201d<\/p>\n<p>In an interview with <a href=\"https:\/\/www.dailywire.com\/news\/the-bidenomics-issues-every-american-should-know-about-kevin-brady-on-unemployment-taxes-and-inflation?al_applink_data=%7B%22target_url%22%3A%22https%3A%5C%2F%5C%2Fwww.dailywire.com%5C%2Fnews%5C%2Fthe-bidenomics-issues-every-american-should-know-about-kevin-brady-on-unemployment-taxes-and-inflation%3Futm_source%3Dfacebook%26utm_medium%3Dsocial%26utm_campaign%3Dbenshapiro%26fbclid%3DIwAR0Sa-er6T2DegajAR3H8AnAVVQICMSDxgOQqqCSBTcdD9zKIqUymTRvJ-g%22%2C%22extras%22%3A%5B%5D%2C%22referer_app_link%22%3A%7B%22url%22%3A%22fb%3A%5C%2F%5C%2F%5C%2F%22%2C%22app_name%22%3A%22Facebook%22%7D%7D\">The Daily Wire<\/a>, Rep. Kevin Brady (R-TX) \u2014 the Ranking Member of the House Ways and Means Committee, which is responsible for deliberating fiscal policy matters \u2014 explained that President Biden\u2019s American Rescue Plan crushed \u201cMain Street businesses\u201d through its $300-per-week enhanced unemployment payments.<\/p>\n<p>\u201cIt\u2019s certainly slowing our recovery and contributing to both slower deliveries and higher prices all up and down the supply chain,\u201d he said. \u201cCompanies of all<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Amid higher inflation and more retirements, public pensions are strapped for cash.Since COVID-19 and the lockdown-induced recession, the inflation rate has risen to 6.2% \u2014 the highest level since 1990. Meanwhile, more Americans are retiring \u2014 contributing to the labor force participation rate reaching its lowest level since the 1970s.According to a report from The Wall Street Journal, both trends are pushing pension funds to take steps that ensure their continued liquidity:Cash allocations have dropped to a seven-year low at the funds that manage more than $4.5 trillion in retirement savings for America\u2019s teachers, police and firefighters. Public pension funds, which have increasingly turned to illiquid private markets to drive up returns, are now aiming to keep about 0.8% of their holdings in cash, according to data from the Boston College Center for Retirement Research. These funds are managing a juggling act faced by many institutional and household investors who want to put their money to work but also want easy access to it in a pinch.The Journal adds that retirements may be poised to surge further:Public pension funds have hundreds of billions of dollars less on hand than the amount they will need to cover promised benefits after two decades of underfunding, unrealistic demands from public-employee unions, and losses during the 2007-2009 financial crisis.Over the same period, their cash-flow margins have thinned as retirees have multiplied relative to the number of current workers. In Connecticut, for example, more than a quarter of the state workforce are eligible to retire between June 2020 and June 2022, Boston Consulting Group found.The average public pension fund wants to keep 0.8% of holdings in cash.Many economists point to higher amounts of federal education, healthcare, and unemployment aid as a contributing factor to labor shortages. Congress has funded nearly $5 trillion in stimulus spending since March 2020; meanwhile, President Biden recently signed a $1.2 infrastructure package, and lawmakers are considering a $1.75 trillion social spending package entitled the \u201cBuild Back Better Act.\u201dIn an interview with The Daily Wire, Rep. Kevin Brady (R-TX) \u2014 the Ranking Member of the House Ways and Means Committee, which is responsible for deliberating fiscal policy matters \u2014 explained that President Biden\u2019s American Rescue Plan crushed \u201cMain Street businesses\u201d through its $300-per-week enhanced unemployment payments.\u201cIt\u2019s certainly slowing our recovery and contributing to both slower deliveries and higher prices all up and down the supply chain,\u201d he said. \u201cCompanies of all sizes simply can\u2019t find the workers they need, whether they\u2019re retailers, restaurateurs, or production lines \u2014 this is inevitable when you pay four out of ten Americans more to stay home than to work.\u201dAccording to Brady, the child tax credit introduces similar distortions.\u201cFor the first time, it is divorced from work. That\u2019s not a requirement for getting it, and so you\u2019re seeing this barrier begin to impact businesses starting last week,\u201d Brady said. \u201cI think the point here is that the federal government is sending a seemingly never-ending supply of checks, regardless of whether you work or not. You\u2019re going to have economic problems, and that\u2019s what we\u2019re seeing.\u201dThe Daily Wire is one of America\u2019s fastest-growing conservative media companies and counter-cultural outlets for news, opinion, and entertainment. Get inside access to The Daily Wire by becoming a member.<\/p>\n","protected":false},"author":99,"featured_media":2315279,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1045021","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1045021","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/99"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1045021"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1045021\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2315279"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1045021"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1045021"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1045021"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}