Regulation of Pension Funds

The Pension Fund management system is seriously flawed, and it is costing Pensioners a great deal of money; as this article by Gretchen Morgenson attests. The GAO found that Pension Funds using what are considered to be deviant practices by their Consultants show annual investment returns 1.3% lower than properly-run Funds. The GAO also found that a 1% difference in fees could generate a 17% difference in a retirement account after 20 years. I personally believe that the entire system of financial arrangements as currently developed generates the necessary heavy-swing Markets for Hedge Funds, etc., to produces the major Profits necessary; and that these practices damage the real performance of the Markets.

Problem Solutions remain my forte, it generating my low rate of Pay; most of the Money non-trusting of any risk to their own Money. This essential fact contributes to my belief that Fund managers get too large a piece of the Pie; maybe, simply because the Fund managers have a better Sales pitch. Still, I ask myself how can the system be altered to forestall excessive Wealth transfers by an out-of-control financial management system. My mind churns feverishly, and I finally decide that Simple is Best; the Wild West atmosphere can best be canceled by clarity of performance incentives.

The actual Nuts and Bolts of my program is a controlled system of compensation, where Salary assumes it rightful place in reward of Labor. A Federal law should be passed which prohibits all but a set Incentive for good performance. Salaries will still be negotiated freely, so that Fund managers and their Employees can evaluate their equivalent worth in the Funds. Incentives, though, would be restricted to a double the Inflation rate Increase of Salary for each Year of performance, and by law granted only if the personal Fund generated an 8% rate of Return or greater. We suddenly find Ourselves in a World where Everyone understands the methodology of Gain for all Participants, pressure for swing-Markets is reduced, and long-term performance is desired by All. Will it Work? I doubt if Anything else will! lgl