You may have received a funding notice from LLNS.
The funding percentage keeps dipping year after year even with hefty employee contributions. It is sitting at 92% for 2023 down from 115% in 2022.
It makes sense to retire as soon as possible while the plan is solvent.
Is my panic justified?
I was told the plan invests heavily I'm corporate bonds. These have been performing well. So, what could be the reason for the underfunding?
Comments
The funding percentage hasn’t been dropping year after year. Yeah, in the latest report it dropped from the beginning of 2022 to the beginning of 2023, but for the year before it increased from 112% to 115%.
Also, the large drop in funding percentage in the latest year wasn’t unexpected because the stock market lost around 15% from the beginning of 2022 to the beginning of 2023. It bounced back by the beginning of 2024 so expect next year’s pension report number to look much better than the 92.88% for the most recent reported year of 2022-2023.
-Damon
It is not all stock, as they also invest in bonds so just looking at stocks is not the best measure.
But if you want to panic there is plenty of doom mongers out there. Below is the latest one with somebody predicting a 50% in the stock drop because of some pattern he found about the yield curve. Take these predictions for what it is but remember if you you are going to panic, panic first.
https://www.dailymail.co.uk/news/article-13389467/american-households-retirement-401k-stock-market-recession.html
Assumptions:
Annual Federal Revenue $X
Interest rates ~2% - 3%
Fixed Federal Expenditures $Y
(social security, defense, etc.)
Goal: 30 year debt repayment
His conclusion was in order for the Federal Government to achieve this 30 year repayment goal, they’d have to double the Federal revenue through taxation, drastically cut federal expenditures, print money, or a combination of all 3.
By the way, his analysis for this chapter of his book, wait for it, was in ~2011, when the Federal Debt was ~16 trillion dollars, today it is 34 trillion dollars…
In 2024, how would our GDP/Federal Revenue and fixed expenditures, fit into this fictitious 30 year federal debt repayment plan? And what about those assumed 2% - 3% interest rates?
5/08/2024 5:32 PM
This brings up a number of issues. (1) To avoid default we need more people in the US to keep economy going hence the need for mass migration. (2) To keep the dollar the worlds currency it means we need to win the war in Ukraine, help Israel, and keep China in check. (3) We need to start implementing some "totalitarian" rules as you call them now to keep the economy going, and keep the population from being upset. This includes making sure Trump or any threat to the state is not put in power. That some kind of housing for migrants is found, that threats to democracy are stoped, and that we can contain any kind of terror threat. Expand the military more, or have enforced military service which could be supplied by the migrants. To keep the dollar alive we need to a much bigger and stronger American empire.
As ironic as it sounds the young people and students are completely on board with this if you ignore some some small issues like the Israeli protests but they are all for the rest of it. In general the woke are for much supportive totalitarian type rule and embrace big-state controls. They are literally the inverse of then student protests of the 60s. All you have to say is that we need to conquer the world to save oppressed people and they will go along with any war, invasion of military aid. This by the way is why the Israel protests are so problematic on campuses and why they are being shut down faster than any BLM riot ever was. It is one the first times the woke generation has not gone along with the narrative.
-Damon
Here it is:
https://my.accessportals.com/app/bdw/login
Thanks! Much appreciated.
-Damon