MODERN INVESTOR: ECONOMOU: THE ‘TRIPLE WHAMMY’ THREAT FACING PENSION FUNDS
"Pension schemes face a triple whammy. They still expect returns of 3-to-5% above inflation, way above real growth in the economy of 1.5%. If nothing improves that means the deficit for Europe’s pension schemes will continue to rise," writes Théodore Economou in 'Modern Investor'.
"Second, pension funds can’t afford to lose more money because investing in cash won’t help recover losses. Lastly, low growth means fees eat up a big chunk of returns.
" Economou explains: "The silver lining is that tools exist to solve the problem. These offer higher returns for the same risk, or the same returns with lower risk. Sounds too good to be true? In fact they are tried, tested and available. Europe’s most sophisticated pension schemes have used them for a while."
Click here to read the full article.
To read the original article on line, click here