by tonytran2015 (Melbourne, Australia).
When a pension fund with legislated rates of pay out operates in a negative interest environment, its fund is bound to be depleted.
You have to ask how can it have money to pay out at the legislated (high positive) rates. It can only do that if it is injected with goverment printed fiat money or if it has an ever expanding number of subscribers (a type of Ponzi scheme).
The stop on payouts by Dallas police fire pension board is no surprise. It is only the tip of the iceberg.
In general, negative interest rates have revealed the unsustainability of many pension plans with legislated rates of payout.
References (augmented after 09 April 2017)
. Dallas police fire pension board ends run, bank stops 154m withdrawals. http://www.dallasnews.com/news/dallas-city-hall/2016/12/08/dallas-police-fire-pension-board-ends-run-bank-stops-154m-withdrawals, 18 Dec 2016.
. Wkchild, Warning: US ponzi-retirement-market in big trouble, protect with precious metals – SRSRocco Report by Steve St. Angelo, sentinelblog.com, https://sentinelblog.com/2017/03/30/warning-u-s-ponzi-retirement-market-in-big-trouble-protect-with-precious-metals/, 30 March 2017.
. SRSRocco, Warning: US ponzi-retirement-market in big trouble, protect with precious metals – SRSRocco Report by Steve St. Angelo, Economy, Precious Metals, https://srsroccoreport.com/warning-u-s-ponzi-retirement-market-in-big-trouble-protect-with-precious-metals/, 28 Mar 2017.
. The next crisis is the mother of all counter party risks part1, US issues, https://us-issues.com/2017/04/09/the-next-crisis-is-the-mother-of-all-counter-party-risks-part-1/, 09 April 2017.
Augmented after 2017 June 11:
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