[hackerlight]

It's not the full picture only because a handful of pension funds do their job properly, they come up with a sensible diversification and put it into passive instruments.

Everything beyond that is a scam. High fees for what should be a simple task, or taking reckless risks or allocating to active managers, is where the scam part comes in, and most of the industry is guilty of that.

[sicp-enjoyer]

Complaining about finance compensation is common, but like sales, it's directly tied to earnings. Suppose you take an easy strategy and get 6%. Suppose a professional can work hard and get 6.2%. It's well worth paying for that top performer when you have a pension of $500 million.

My guess is that much of the distortion is caused by moral hazard where pensions know they will be bailed out for taking ridiculous risks, not because they pay professionals to manage money.