On the finance front, PA is joining the ranks of states instituting pension reforms:
We need a new approach - and we need to question the decisions that got us to where we are today. For example, why are we paying Wall Street managers hundreds of millions of dollars to manage our pension fund?In September, the state of California announced it was pulling its public pension money out of hedge funds and replacing many actively-managed funds with index mutual funds to save the state money while improving returns for investors.
That doesn't help our middle class, it doesn't help our seniors, and it needs to change.
Believe it or not, as I mentioned earlier: our state has been wasting hundreds of millions of taxpayer dollars on Wall Street managers to handle state pension accounts.
But studies have shown that simply investing this money in a safe, conservative account would produce a similar return over the long term while eliminating these excessive management fees.
So, here's what we are going to do:
We are going to stop excessive fees to Wall Street managers.
We're going to improve retirement security for state workers.
With these and other improvements, we are going to save taxpayers nearly 1.3 billion dollars over the next five years while creating savings of 10 billion dollars in the unfunded liability.
Paying high fees to active fund managers who consistently fail to beat the market is a loser's game.
Read my series on index investing to find out how you can hold the entire market, cut your fees to nothing, and get your fair share of market returns. Contact me if you need help getting started!