Credit Suisse Pulls Up the Firetruck After the Building Has Burnt to the Ground

The Wall Street Journal gave considerable play to a new report by Credit Suisse that warns about the condition of multi-employer pension plan. The article tells readers that the Department of Labor:

"uses an 'actuarial' reading of the numbers, which envisions an average (and hefty) 7.5% rate of return on investments, smoothed over five years."

Actually, given the current price to earning ratio in the stock market, a 7.5 percent nominal return assumption is perfectly reasonable for funds that...