Quote Originally Posted by Wesley Mouch View Post
I should think if you planned for 4.0%, then you could increase benefits safely when you get 6.75%. Relying on a more aggressive figure only encourages less funding today. Why would we want to do that?
Good question. At a 4.0% investment rate both funds would have a even larger unfunded liability than they do now and the taxpayers would owe MUCH more to the funds RIGHT NOW. A 6.75% investment rate sounds good to the pensioners and if they do not earn that rate, then no problem - they will command it from the taxpayers at a later date.

And save it for a "rainy day"? Forget about it - how do you think they funded those 13th checks? Yes, that "extra" money from the good years. So when the bad years rolled in, the trustees just commanded that the taxpayers refill the pot.

These investment rate ASSUMPTIONS are just that assumptions that complicate the negotiations and only time and the economy will show who made the "right" assumptions. This is also why I believe a higher rate is just setting us up for a repeat in the future.