SPECIAL REPORT: America's Looming Pension Crisis - It's Worse Than You Imagine | Stephanie Pomboy

**Adam Taggart** (0:01)
All right, and we should be live. Welcome to Thoughtful Money. I'm Thoughtful Money founder and your host, Adam Taggart. Welcoming you here for a special Wednesdays with Stephanie Pomboy. Hi, Steph, how are you doing?

**Stephanie Pomboy** (0:12)
I'm good. How are you, Adam?

**Adam Taggart** (0:14)
Well, I'm great, and particularly excited today because not only are we going to get to have you on your regular bi-weekly appearance on this channel, but we're joined today by a special guest. We're joined by pension expert, Ted Siedle. Folks, you've heard Stephanie and I mentioned many times in the past that our pension system definitely has some concerning vulnerabilities to it. I'll say that. That's probably a big understatement, as Ted will explain in just a moment. But Ted, who I've interviewed a couple of times over the years, great guy, he is a former SEC attorney, and his firm has pioneered over one trillion in forensic investigations into the money management industry. He's nationally recognized as an authority on pensions, and he's testified before the Senate Banking Committee regarding fund scandals and is an expert in various made-off related and other investigations. He also secured the largest SEC whistleblower award in history and the largest CFTC award in history as well. Ted, thanks for joining us today. I've got a lot of road to cover here. Folks, if we have time at the end, I'll try to take some questions from the audience as well so you can ask them, Ted. But I want to start just by reading something that you wrote a few years ago, Ted, and then we'll kind of open up this discussion. You said, quote, We are on the precipice of the greatest retirement crisis in the history of the world. And that makes perfect sense because first of all, we have the largest elderly population in the history of the world. Just focusing on the United States, our elderly are woefully unprepared to retire. And in the decades to come, we will witness millions of elderly Americans, baby boomers and others slipping into poverty. Too frail to work, too poor to retire will become the new normal for many elderly Americans. All right. So that is the tough news. The question is, what do we do about it? But why don't we just start at the very top, Ted?
I know we got a lot of specific questions we get to get into, and there's a number of specific investigations you're involved in right now across the country, but at a very high level, what is the state of our pension system and why are you this concerned about it?

**Ted Siedle** (2:34)
Well, of course, Adam, most people don't have pensions anymore. Pensions are phasing out, but for those who do, there's lots to worry about. I do a lot of my work with state and local pensions, which are called public pensions, as opposed to corporate pensions that are private pensions. And public pensions that have about $6 trillion in assets in them are not regulated on the federal level at all.
Corporate pensions are regulated under ERISA, so there's a comprehensive federal law. Public pensions, state pensions, are not governed by any comprehensive law. The boards of these pensions consist of firefighters, policemen, politicians, none of whom have any investment experience. So they're watching over, making decisions about how to invest $6.5 trillion of state workers' money. So there's a lot, there are a lot of things to worry about in the public pension space in particular. And what we've seen over the last 20 years is allocation of ever greater assets to high risk, high cost, private, equity, hedge funds. And now we're on the precipice of state pensions investing up to 10% in crypto, which has never happened in history. And that's about, that's what we're poised to happen now. I think 17 states have legislation to invest up to 10% of their assets in crypto.

**Adam Taggart** (4:16)
That is absolutely frightening. So just to recap some of the previous discussions we've had, you really boil this down simply in a way that's easy to understand. When you say, when it kind of comes to the solvency of pensions, it comes down to three things. And correct me if any of this is wrong. It's how much you put in, right?
It's how it's managed while it's there. And then it's how much comes out, right? And I think you can kind of walk through each and tell kind of a scary story about each one of those steps. But my recollection is maybe the scariest story is not we're putting in too little and we're taking up too much, but it's how mismanaged it's being when it's actually in the pension system. Am I correct in this summary?