As other commentators point out, the 7%+ assumed rate of return is beyond ludricrous - it's basically an outright lie to future retirees and taxpayers. But since the current politicians won't be in charge in 10-30 years when the investment assumptions blow up, they have no incentive to be honest to government employees who are depending on the retirement funds being there for them, or any reason to be honest with future taxpayers who will be asked to make up the funding shortfall.

The reason why the assumed rate of return is so important is that if the city sets aside $1,000 now for someone's future retirement, and if the city assumes a 7% rate of return, the $1,000 deposited today will grow to $8,000 over 30 years (the "rule of 72"). If the actual rate of investment return is only 4%, however, then the $1,000 only grows to under $4,000 in 30 years - a huge funding discrepancy when you're talking about hundreds of millions of dollars of future retiree liabilities. Add city, county, state, and federal pension plans all using "hopium" investment returns to justify reduced current retirement funding amounts, and then add in school districts, water districts, the military and dozens of other government agencies all relying on the same hopium investment returns, and you're talking about some serious funding shortfalls. Trillions upon trillions nationwide.

With 10's of millions of baby boomers (born 1946-1964) retiring over the next 10-15 years who won't be paying much tax after retirement, but who will be collecting billions from pension plans including social security and medicare, it wouldn't be surprising if in 30 years all government agencies have to shut down current operations just to pay for the unfunded pension and healthcare liaiblities because adequate funds were not set aside today.

The US economy is basically done growing, outside of the technology and biotech sectors. And even parts of these sectors will be outsourced to far cheaper labor locations whenever it's possible to do so. The flat growth rates of Europe and Japan have become the norm in the US as well, with most of the world's economic growth happening in emerging markets where people don't have adequate housing, roads, water and sewage systems, schools, bridges and other infrastrucure that's mostly been built in the developed economies. Assuming investment growth of 7% in a flat economic environment like the US is borderline criminal.

If a person is relatively young but doesn't come from family wealth, or expect to be in the top 20% of wage earners, or can't get a job in government that offers some job security and very rich benefit packages, they should be considering moving far from the US to other countries where economic opportunites abound, such a SE Asia, South America, and one day soon even Africa. In the US, the government and private landlords have made sure the biggest portion of your future earnings will go to taxes and high housing costs, and the chance for what was once considered a solid middle-class livelihood will be merely a passing mention in a future history book.

Who would have thought the 1950's and 1960's would be the pinnacle of US prosperity for a huge percentage of the population, but that sure looks like how it's going to play out.