The pension problems in Springfield were discussed in depth in the Wall Street Journal the other day. Richard C. Dreyfuss, an actuarial expert who authored a study of Missouri’s largest public pensions for the Show-Me Institute, went to Springfield a few weeks ago to discuss his recent paper before a group there.
Perhaps the most insightful line in the article is about the meeting where Springfield’s pension reps, after meeting with a Prudential salesman, decided it was a great idea to put a ton of money into Manhattan real estate — and I don’t mean Manhattan, Kan.:
The Springfield fund’s board members in attendance — one policeman, two firemen, one retired fireman, three citizens and two City Hall officials — were generally impressed, meeting minutes show. Ron Hoffman, the retiree, noted Prudential’s decades of experience: “The more history you have, the smarter you are going to be,” he said, according to the minutes. By a vote of 6-2, with one not voting, the board chose to invest its entire real-estate allocation — $12 million — with Prudential.
As the article describes, the real estate deal has not gone so well. I’m surprised Prudential didn’t try to sell Springfield on another monorail.
