The problem of underfunded pensions will continue to be a battle ground between bondholders and pension beneficiaries for the next decade. Too little has been contributed and too many benefits have been promised to be paid. But if bondholders are made whole while pensioners suffer all the losses, we (the economy) will only pay the price that much longer through even weaker consumer demand. The best possible outcomes will involve some losses to bondholders and pensioners, and increased funding requirements for corporate sponsors which will help to mean revert those record profit margins companies have enjoyed over the past several years. Of course financial types have extrapolated the record profit trend for as far as the eye can dream. But what goes around comes around. In the end, we all have to pay for the reckless policies of the past 15 years. Here is a direct link.
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