Tuesday, April 26, 2011

Catastrophe: State pension systems $1.26T in the red -- up 26% in one year

I suspect that the members of America's public sector unions will be nonplussed to discover that their platinum-plated benefits have all the likelihood of surviving as Tyrannosaurus Rex. Pew Research reports that these pensions, by and large, are headed right into the tarmac.

States are $1.26 trillion in the hole when it comes to their pension and retiree health obligations, according to a report released Tuesday...

...And taxpayers are ultimately on the hook for this shortfall, which soared 26% in one year...

...States are largely responsible for this predicament. As tax revenues plummeted, many skipped part or all of their annual retiree benefits contributions as they struggled to pay for education, Medicaid and other services.

States only contributed a total of 64% of the nearly $115 billion their actuaries recommended they put in their pension funds for that year, the center said. They now face a $660 billion gap in these accounts... Meanwhile states socked away a mere 36% of the recommended $47 billion in funding for their retiree health and other benefits. Even more concerning -- 19 states have saved nothing for these obligations, instead of paying the costs as they are incurred, the Pew Center said...

A commenter observes that ""Pennsylvania retired teachers receive 80% of their working salary and some receive free health care insurance for life. And, a 35 year 'pension/career' in teaching is the equivalent of about 28 years on the job in the private sector... There's not one company in the private sector, none, that allows you to retire with that exorbitant package - not one. No wonder states are flat broke. We're approaching the tipping point."

Approaching? I think we're well past it, folks. And to minimize the economic damage, we've got to contain the Statists and begin rolling back their insane fiscal policies.

1 comment:

  1. Trialdog8:35 AM

    "And taxpayers are ultimately on the hook for this shortfall..."
    No. And any candidate with the courage to say no will win.