August 11, 2013
...Larkin's claim Larkin’s claim that Detroit (click here) did not need to file for bankruptcy is based on financial assumptions that are, needless to say, much rosier than those of Detroit emergency manager Kevyn Orr. To take the most obvious point of contention, Larkin proclaims that the city’s two pension funds are not underfunded by more than $3 billion, as Orr stated in his June 14 plan of reorganization.
Rather, Larkin says the funds are financially sound and assumption of a long-term 8% rate of return is realistic, despite Orr’s concerns that it’s too optimistic. "Stock market" returns are indeed volatile, and yet the 25-year average of annualized returns for the S&P 500 has not been below 8% since 1954,” Larkin wrote....
...Larkin's claim Larkin’s claim that Detroit (click here) did not need to file for bankruptcy is based on financial assumptions that are, needless to say, much rosier than those of Detroit emergency manager Kevyn Orr. To take the most obvious point of contention, Larkin proclaims that the city’s two pension funds are not underfunded by more than $3 billion, as Orr stated in his June 14 plan of reorganization.
Rather, Larkin says the funds are financially sound and assumption of a long-term 8% rate of return is realistic, despite Orr’s concerns that it’s too optimistic. "Stock market" returns are indeed volatile, and yet the 25-year average of annualized returns for the S&P 500 has not been below 8% since 1954,” Larkin wrote....
