• In California roughly 200,000 of the 235,000 state employees are unionized. In the last decade, pension payments by the state increased 2,000% with $3 billion paid out in 2009 alone. 15,000 retirees collect at least $100,000 a year. Many are former police officers, firefighters and prison guards who can retire at age 50 with pensions that pay 90% of final year's pay and are indexed for inflation. Given increasing lifespans, many of these retirees will collect payments for 40 or more years -- far longer than they worked for the state.
• In Illinois, more than 4,000 retirees receive in excess of $100,000 annually and nearly 15,000 collect more money than they ever did as state employees. The state's pension system is the most underfunded plan in the nation with a $50 billion shortfall.
• In Massachusetts more than 100 retirees collect over $183,000 a year. State and local pensions are underfunded by an estimated $22 billion. And some workers continue to game the system. It appears that some local pension boards transferred workers to different jobs on their last day of employment in order to collect extra benefits.
• In New Jersey the Democrats in charge orchestrated a series of pension gaffes. In the 90's, when the economy was robust, the state legislature stopped contributing to the pension fund though $4.6 billion of benefits accrued. The state is also one of many that "kicked the can down the road" by selling bonds to pay for pension benefits. In 1997 New Jersey sold $2.75 billion of pension bonds which pay a fixed 7.64 interest rate; the fund, however, has only earned 4.8%, so the entire exercise cost the state an extra half a billion dollars.
• In New York the teachers' pension fund lost $9 billion while ringing up increased costs; overall the teachers' system is underfunded by at least $15 billion. In the last decade, teachers' salaries rose 43% but their contributions to pension plans dropped from 18% of the total to 6%. Over the same time span, a state law was passed that allowed the highest-paid teachers to avoid contributing to their pensions entirely.
And this is just a small sample of the rot festering inside the public retirement plans. In total the U.S. public pension system is underfunded by more than $2 trillion.
....[the underfunding deficit] will increase pressure on many states’ strained finances and crimp economic growth, according to the chairman of New Jersey’s pension fund. The estimate by Orin Kramer will fuel investors’ concerns over the deteriorating financial health of US states after the recession. “State and local governments are correctly perceived to be in serious difficulty,” Mr Kramer told the Financial Times... “If you factor in the reality of these unfunded promises, their deficits will rise exponentially.”
Estimates of aggregate funding requirement of the US pension system have ranged between $400bn and $500bn, but Mr Kramer’s analysis concluded that public funds would need to find more than $2,000bn to meet future pension obligations.
Public sector union bosses have completely hosed their members and taxpayers by constructing impossible pension payment schemes. The shortfall will be real, the outrage formidable and the misery significant.
When a company goes bankrupt, the Pension Benefit Guarantee Corp (PBGC) is intended to step in to cover the shortfall. But the PBGC does not protect state or local retirement plans.
It's high time that public-sector unions were outlawed and all such organizations currently operating disbanded. It's clear that they serve no useful purpose other than soaking taxpayers and their rank-and-file members.