Defined Benefit Plans (Pensions)

Pension funds are still using 8% annualized returns as their internal rate of return.  In a zero-interest rate environment, you cannot even come close to approaching that return of 8%, which, of course, forces these funds into risky asset classes, such as stocks and investment grade bonds (BBB).  (Defined benefit plans are underfunded to the amount in excess of $1 trillion.)  Anyone receiving a defined benefit payout better start learning to live on half of that amount, which may not be conservative enough.  Why?  Because those plans will take a haircut of at least 50%, given the potential for an economic melt down over the next four years.  In other words, learn to live with less, not more!