Pension Fund Saved!

Listen to this! Managers of the State's Pension Fund have found a way to save us from the $30 billion shortfall in the fund. "Managers of New Jersey's $70 billion in pension funds yesterday voted to invest $325 million of the holdings in three privately managed investment funds, marking the first time in 50 years that private managers have had control over money in the pension accounts." Link

Now, I could have sworn when I wrote about this on May 19th in a post titled "Pension Fund Blues " State Treasurer John McCormac was quoted as saying it was a $25 billion shortfall (or was that school construction, I get confused with big numbers).

Well, neither her nor there. After all, what's a few billion dollars amongst friends? What should be of overriding concern is that McCormac and Orin Kramer the Chairman of the Investment Council want to put a total of $1.75 Billion in private investment manager's hands because the two believe "...the pension fund needs to expand beyond its current portfolio of stocks and bonds to generate higher returns and dampen the risk of dramatic losses during stock market declines."

They're going to give control of $1.75 billion to people that run hedge funds and real estate trusts. Just thinking about the secure investments that are derivatives, collateralized debt obligations and reit's will help me sleep at night. How about you?