Pensions plans are in trouble (and it’s going to get worse)
https://pitchbook.com/news/articles/pensions-plans-are-in-trouble-and-its-going-to-get-worse
via @PitchBook
Not a good picture in the horizon!
McKinsey, in a report from last year, warned of a future of diminished investment returns where “investors may need to lower their expectations” as we exit a “golden era” for financial assets associated largely with the three-decade-plus bull market in bonds. This period was associated with an average annual real total equity return of 7.9% and a real bond return of 5% in the US—1.4% and 3.3% above the 100-year averages, respectively—driven by tailwinds such as lower inflation, strong global GDP growth, positive demographics and productivity gains that are now subsiding.
As a result, they are looking for US equity returns to average 4% to 5% over the next 20 years with fixed-income returns around 0% to 1%.