Promises Made, Promises Broken - The Betrayal of Pensioners and Taxpayers SBS report points to $4.1 trillion in underfunded public pensions
Comprehensive research into the funded status of state-administered pension plans reveals that public employee retirement promises are underfunded by $4.1 trillion. Combined, state-administered pension plans are just 39 percent funded.
Figures were drawn from state Fiscal Year 2012 Comprehensive Annual Financial Reports, as well as the Comprehensive Annual Financial Reports and actuarial valuations published by individual plans. In each case, figures were from the most up-to-date valuation available at the time of research. Plans were compiled based on the United States Census Bureau's Annual Survey of Public Pensions and state-level financial reports. Therefore this includes municipal pension funds that are administered by the state.
States facing a particularly large unfunded liability at a per capita level and as a percentage of their annual gross state product include Illinois, Ohio, New Jersey, Oregon, Connecticut, Nevada, New Mexico, Hawaii, and Alaska. As this report demonstrates, unfunded public pension liabilities present a unique threat to state government finances. While many have tried to turn a blind eye to the pension crisis, the problem is simply too big to ignore.
If you thought California’s labor unions couldn’t get any stronger, you would be wrong. Of course, it doesn’t hurt to have the U.S. Secretary of Labor in your corner.
In a letter to Governor Jerry Brown, Secretary Tom Perez said that the Department of Labor can withhold up to $1.6 billion in federal mass transportation grants if the state does not come to an agreement with transit labor unions to reverse pension reforms that passed the legislature and were signed by Brown last year. Perez is pulling on strings attached to the federal money because he believes the reforms violate the collective bargaining protections in the federal law providing for mass transit grants.
State Budget Solutions is a known expert in fiscal responsibility and pension reform. Every month, countless media outlets and financial professionals cite the work of SBS's expert analysis and publish the opinions of SBS leaders.
After Detroit, how about 401(k)s for public workers? CNN - September 3, 2013
Combined, city and state unfunded pension debts amount to $4.6 trillion, according to an analysis published by State Budget Solutions, a conservative-leaning group.
The crisis is recognized by many, but unfortunately, most of the proposed solutions are either shortsighted or just plain silly. In Illinois, for instance, Gov. Pat Quinn at one point suggested a federal bailout of the state's pension debt, a call that has been echoed by many for Detroit. Given the federal government's own fiscal problems, this proposal has been dismissed as irresponsible.Read More
Study: State pension shortfalls reach $4.1 trillion Daily Caller - September 3, 2013
America’s state-level public employee pensions are underfunded by $4.1 trillion, according to a study released Tuesday by the organization State Budget Solutions.
State public pensions in the United States are only 39 percent funded, according to the study.
Illinois is facing the worst pension crisis in the country, with pensions in the state only 24 percent funded, and with an unfunded liability of more than $287 billion (more than $22,000 per person) against less than $92 billion in actuarial assets. Pensions in Connecticut, Kentucky and Kansas are also less than 30 percent funded, according to the study.
As a former state legislator, gubernatorial candidate and auditor with the Government Accountability Office, State Budget Solutions' President Bob Williams is a national expert in fiscal and tax policies. Each week, he compiles the latest news and headlines pertaining to state budgets, collective bargaining and state public pensions into The Williams Report.