Springfield Pension Problems Make the Wall Street Journal

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.