Quote Originally Posted by Packman41 View Post
No. The number of current workers is relevant. These pension funds were designed much as Social Security and a ponzi scheme...
First, let's get the terms right. A pension system that requires an 9.25% return on investment in order to be financially viable is not a "Ponzi scheme". As long as the fund earns a total return on its investments that is equal to, or greater than, 8% then it requires no additional support from the taxpayers beyond what is agreed to while a given employee is working.

The problems only arise when the City either doesn't make the contributions required for current employees or the rate of return is less than 9.25%.

Also the yield on investment income was 16.9% that is VERY GOOD.
A 16.9% rate of return is indeed a very good yield. However, that's not what the pension fund earned in 2010, nor is it what the fund earned in 2008 or 2009. 16.9% is its composite return over the past several years.

The fund had exceptional performance in 2004, 2006, and 2007. This is what has brought its composite earnings up to the 16.9% level. Unfortunately, its returns since 2007 have weighed the fund down considerably.

The fund only earned 6.8% in 2010. This was after losing a considerable amount of money on investments in 2008 and 2009.

3 years of bad earnings do necessitate an infusion of cash. It also points to the fact that we need to take a very close look at the type of investments they are making.

However, it is not a "Ponzi scheme".