Interesting analysis on pension liability at state, county and city level

[petershk]

It's a bit technical, but there's decent summaries. I personally don't have a pension, but I think these things are generally important.

Hidden Debt, Hidden Deficits: How Pension Promises Are Consuming State And Local Budgets | Hoover Institution

I found the authors method of calculating pretty reasonable and it was nice to try an apples to apples comparison which is normally difficult because pension plans vastly differ in their expected returns, discount rates and future participation rules.

 

[jazz4cash]

Based on the comments this is the same guy I saw on CNBC today. His main point was that the pension systems shortfall is 1B by their own assumptions but it is actually more like 3.5B by his assumptions. CNBC asked what ROI he was using and he admitted ~3% based on muni bond rates. CNBC then pushed the notion that maybe they could do better using hedge funds! So it's a matter of EXTREMES? This covers over the fact that many systems are in trouble not only due to rosy assumptions but also because they failed to make contributions when their budgets were tight.


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[Spanky]

Thanks for sharing. It's informative about the promises to pay retired public workers. This article implies that some sort of reform is needed to remedy the shortfall. There's another article, though dated, suggests that the deficit will be resolved as the economy recovers.
Misunderstandings Regarding State Debt, Pensions, and Retiree Health Costs Create Unnecessary Alarm | Center on Budget and Policy Priorities

 

[DrRoy]

There are many gov't pension programs at all levels that are in severly underfunded condition. Detroit is a good example, and even with the partial bankruptcy resolution and pension reductions they are still not totally out of the woods. Puerto Rico and Illinois are further examples. Even if you are not due one of these pensions you are likely to be involved as a taxpayer. [mod edit] Now those bills are coming due but the money is not there.