Annual Report: Pension Liabilities Are Getting Even Worse
The bankruptcies of cities like Detroit and Stockton, California, have shined fairly bright lights on the fiscal unsustainability of benefits offered to public employees. And we've seen at least lip service and some stabs at reform, lackluster as they may be. So you'd think maybe we'd see just a little bit of improvement in the state of public employee pensions now that the alarm bells have been going off for a few years now.
Nope.
Today State Budget Solutions, a non-profit policy organization that focuses on, among other things, the state of public pensions, has released its annual report. They've calculated that for 2014, unfunded state pension liabilities across the country have actually increased from $4.1 trillion to $4.7 trillion. They've unsurprisingly titled their report for this year "Promises Made, Promises Broken":
Overall, the combined plans' funded status has dipped three percentage points to 36%. Split among all Americans, the unfunded liability is over $15,000 per person.
This spells trouble for the millions of Baby Boomers who are quickly approaching retirement age and expect to collect the pensions promised to them by government officials. Furthermore, state taxpayers who are not government employees will also feel the pinch, which could result in reduced government services, as larger and larger portions of the states' budgets must be allocated to cover the public pension shortfall. This report gives ample support for reform efforts that would protect pensions and vital public services.
State Budget Solutions offers several different charts to help understand which states are doing the worst in funding pensions, because it can get a little complicated. California has the biggest flat liability, but it's partly because the state is so large and has so many employees. Despite the state's fiscal crisis, California doesn't even crack the top ten in terms of how poorly they've actually funded their pensions. Illinois, unsurprisingly, ranks on either first or second on all three lists. Its unfunded pension liabilities are more than $330 million, it has funded only 22 percent of its liabilities, and each resident of the state is on the hook for more than $25,000 for these liabilities.
Read more about their report here.
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Putting lipstick on a pig always leads to bad ends.
Squeel like a pig!
In what way is pension reform like fucking a pig?
Think of it as NOT engaging in pension reform. And the pig is a piggy bank.
Pigs get fat, hogs get anally raped.
Once again Shackford is guaranteeing that his actual article won’t be the subject of reader comments.
To be fair, there could be no photo and 50% of the comments on any article would be OT around here.
Everyone’s jokes aside (yes, it was the first thing to occur to me, as well), this is quite depressing news. Equities and fixed income have continued to do well since the financial crisis. You’d be expecting the underfunding to ease somewhat. In the next market correction (and, yes, it is coming), we’ll see the numbers turn much worse.
unfunded state pension liabilities across the country have actually increased from $4.1 trillion to $4.7 trillion
But how many trillions have those greedy bastards in the private sector tucked away untaxed in IRAs and 401-Ks all these years? How can any decent society allow this inequality to stand, when the greedy rich tuck away money just to avoid paying taxes on it while our hard-working low-pay humble public servants are threatened with spending their golden years scrounging for food in the dumpsters they’ll be living in? I can see a “one time only, emergency ‘fairness’ equalization surcharge” coming, ala the Greek attempt to seize bank accounts of the wealthy because the government was broke.
(Truthfully, when they first introduced the IRAs I figured that the “tax deferred” part of that would last only until the Feds realized just how big a pot of money was sitting there that they hadn’t gotten their grubby paws on and I predicted that they would levy a “special, one-time only” tax on IRAs by the year 2000. I was wrong on that, apparenttly somebody else is familiar with Machiavelli’s admonition that people will stand for you killing their father sooner than they will stand for you seizing their father’s money. But at some point the government is going to be so damn broke they’re just going to have to drop any pretense at being anything other than a really well organized criminal gang.)
Well one of the reasons I’ve never contributed to a Roth is because I think at some point all the voluntary retirement funds will be taxed. And the Roth contributors (who paid taxes on the front end) will get it coming and going.