May 29, 2018

Public pensions in trouble

CBS News - Many pension funds for public workers already owe far more in retirement benefits than they have in the bank, and the problem will only grow worse if the economy slows down, according to a report.

The study from The Pew Charitable Trusts found that the New Jersey and Kentucky public pension funds are in such perilous shape that they risk running dry.

"Even after eight years of economic recovery — eight straight years of stock market gains — the public pension plans are more vulnerable than they've ever been to the next recession," researcher Greg Mennis said in an interview.

Governments have been ramping up contributions to the funds to help cover the promises they've made to retirees, but that leaves less money to spend on schools, police, parks and other core government services.

Another option is reducing pension benefits. A plan to do that in Kentucky led to teacher walkouts earlier this year.

5 comments:

Anonymous said...

Seems there were some lucky public employees that, as they neared retirement, their salaries were inflated greatly. Then, as a result of their last three years of employment's salary, their pension was greatly increased.
No wonder there are troubles.

greg gerritt said...

The trouble anonymous discusses is just a tiny bit of the mproblem. The real trouble is that pension funds are almost always underfunded, and therefore they rely on unrealistic returns of investments to make up the difference. So underfunded and unrealistic expactations combined with an economy headed into regular recessions that benefit only the few means pension funds are screwed and while the sweetheart deals with municipal unions are bad, they really only the icing, not the cake. As the economy sputters, this will get worse eveywhere, but the only sdlution is to soak the rich since they all have thier retirements intact.

In Providence the city is trying to sell the reservoir and water system, to put money into the pension fund, but even if they get $300 million, it will not solve the probelem in any way, shape, or form. And some of the best water in America will be at risk from profit seeking.

Anonymous said...

Of course, the pensions could always do what my pension did.

Change from a 'defined benefit' to a 'defined contribution' pension.

Instead of meaning that "pension funds are screwed", the individual employee can be.

Anonymous said...

Idiot boomers

Anonymous said...

Re: Anon @ 11:53

Corporate Troll