"Right now, Los Angeles spends about $1.2 billion a year to fund its three pension plans. If those plans produce their projected investment return over the next five years, Los Angeles will be paying $2 billion a year in 2017. And that's if the pension funds earn an annual rate of return of 7.75%, which is almost surely unrealistic, especially given that about a third of the systems' investments are in fixed-income assets that are today paying historically low interest rates. To achieve an overall return of 7.75%, the pension funds would thus need returns of roughly 15% a year on the equities they buy. That's preposterous."  MORE >>