- Just when you thought it was safe to get back into the market
- Entitlement train wreck is ahead of schedule
- Are we ready to take control of our pensions?
- If the Swedes can do it, why can't we?
State pension benefits are protected by law, and must be paid even if the fund is making a loss. Calpers, the largest fund, has lost $70bn in value in the past eight months, but still has to pay $11bn in benefits this year. Unless the fund starts recouping its losses soon, the California state government, which is already mired in a huge deficit, will have to lift contributions to Calpers starting from next year.
...According to the Pension Benefit Guaranty Corporation, which regulates and insures pensions, ...the current underfunding in public plans, which cover about 22 million workers, seems to be something north of a trillion dollars. And they're not insured.The funds that are responsible are a different sort of headache; they'll be slapping heavy levies on local school districts and governments to shore up their capital. That will be a nasty burden on strapped local governments, particularly in places that are already in decline. ... In good years, the market booms, tax revenue soars, and not only does their mandatory pension contribution fall, but the state often offers extra help out of the tax windfall. In bad years, the state aid disappears, their mandatory contribution goes up, and the senior citizens on fixed incomes start assembling pitchforks and torches for the march on city hall.
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