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Yashi

Sunday, June 27, 2010

An Idea Whose Time Has Come: Reverse Auctions for Selecting Pension/Investment Advisors



This is an interesting development our of California (where all trends do start). San Diego County is - like many, many local and state governments - experiencing massive problems with its pension system. Now, the unique Grand Jury of San Diego County (http://www.sdcounty.ca.gov/grandjury/index.html) has put forward a series of recommendations to help "fix" their broken retirement system.

The San Diego City Employees' Retirement System has incurred a whopping $7 billion deficit! Now, the San Diego County Grand Jury has proposed a number of options to deal with this massive problem, including dissolving the entire pension system. One of its principal options, according to Pensions & Investments, is to have the retirement system select investment advisers through a reverse auction process to ensure that the pension fund is receiving the most cost-competitive, quality advisory services.  Read the complete article here:


This is most assuredly an area that is ripe for employing competitive bidding. Reverse auctions would certainly seem to be a great answer for providing transparency and true competition, replacing a legacy of deals too often made nationwide in fancy restaurants, on golf courses, and in back rooms. Here at the Reverse Auction Research Center (http://reverseauctionresearch.blogspot.com/), we'll keep tabs on what may indeed be a new trend coming from California.

David

From the Reverse Auction Research Center: http://reverseauctionresearch.blogspot.com/



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