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Pension outlook distorted by rose-tinted glasses Add to ...

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When it comes to managing pensions, optimism is a cardinal sin.

But there’s evidence to suggest that many Canadian pension funds are built on unrealistic expectations regarding their returns, putting at risk the financial plans of many future Canadian retirees.

“Nobody likes to hear this but it’s a bitter medicine we all need,” said Moshe Milevsky, co-author of Pensionize Your Nest Egg and a finance professor at York University's Schulich School of Business. “Otherwise, we get into a situation like many states in the U.S., where they have deficits of 50 or 60 per cent because of unrealistic assumptions.”

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