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The Suddenly Poor Life: Millions Will Lose Their Pensions

Alton

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The harsh reality is that state governments ARE NOT AND HAVE NOT been funding these retirement plans. This is further compounded by Wall St. losses. So, participants in these plans are going to get boned. Teachers and other gov employees can protest all they want and it will change absolutely nothing. Their future is already history.
 

oldgaranddad

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This only one of the first dominos to keel over. In NY we’ve see a Teamsters pension fund go belly up and the membership vote not to take cuts. Cuts were imposed after the pension imploded and the pension guarantee board had to step in. Union now blames the Feds for the mess of their own making.

Many states are using smoke and mirrors to make their messes look good. Many pension funds are borrowing and lending to each other that no one really knows who owes who with all these derivative schemes.

There’s going to be a lot of people who are going to be living in cardboard boxes in the future.
 

gringott

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I remember when I was a kid there was some big pension fail...

I don't remember who exactly, but it was something... auto industry? Steel?
Don't know about back in the 1920's when you were a kid, but here is a list of the 10 big boys as of 2010.

Link: The 10 biggest Failed Pension Funds

claims. Here’s a look at the 10 biggest pension failures ever turned over to the PBGC.



Firm and Year Terminated Total Claims Vested Participants Average Claim Per Person
1. United Airlines (2005) $7.4 billion 123,957 $60,033
2. Delphi (2009) $6.1 billion 69,042 $88,475
3. Bethlehem Steel (2003) $3.7 billion 91,312 $40,021
4. US Airways (2003) $2.8 billion 55,770 $49,337
5. LTV Steel (2002, 2003, 2004) $2.1 billion 83,094 $25,694
6. Delta Air Lines (2006) $1.6 billion 13,291 $123,473
7. National Steel (2003) $1.3 billion 33,737 $37,811
8. Pan American Air (1991, 1992) $0.8 billion 31,999 $26,285
9. Trans World Airlines (2001) $0.7 billion 32,263 $20,717
10. Weirton Steel (2004) $0.6 billion 9,410 $68,064
Top 10 Total $27 billion 543,875 $49,933
 

Scorpio

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we can be fair about this also,

where it isn't just the teachers and their leaching off the rest of us,

it is the po po dept, the smokey dept, all the permitting depts, etc, etc

don't underestimate the magnitude of the issue,

they use the teachers to run cover for all the others 'cause it is 'for the children'

meanwhile they sell off our roads, and charge us tolls............

cool!
 

GOLDBRIX

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...it is the po po dept, the smokey dept,...
I don't know about other states & commonwealths but in Kentucky Police & Firemen have a separate fund & funding of their pensions. Plus most LEOs and FDs have earlier retirement plans. 65 year olds don't hold up well running down 20 yr. old criminals or running into or abating blazing infernos.

The file & court clerks, cashiers, and janitors,..... those jobbers go to 65.
 

Mujahideen

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Am I a bad person for reading this with glee?
 

GOLDBRIX

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Nobody is a harsher critic of you than yourself.
 

GOLDBRIX

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of no consequence, just another bite of the same rotten apple
Like lawyers nobody wants one until they are in need of one
 

Scorpio

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Like lawyers nobody wants one until they are in need of one
which misses the point,

I get it, you are trying to justify one portion of .gov, declaring separate and all that jazz,

Many would agree that some functions of .gov are legit,

while at the same time, claiming they are vastly overpaid with far greater compensation, pensions, and work rules compared to private industry.

mixing the 2 to obfuscate the issue, does not solve the problem at its base level,
 

the_shootist

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Leaving all your eggs in one basket isn't a good retirement strategy. Those who others to look out for their well being risk losing everything. It is what it is!
 

Buck

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Am I a bad person for reading this with glee?
Not in my opinion except, where I separate myself from this is:
You should never blame the victim if all of the elements are equal
You get a job, you get a job with a pension, you get to vote if you get more money in your pension
That's A No Brainer!

Public Servants should Have No Pension, that's a no brainer too!

What I have trouble with is, the acceptance of anyone who claims to be a leader while they claim what they agreed to, with regards to anyone's pension, was a good idea, especially when the math doesn't work, and right now, no one's math from the past is working

We need to unwind this and hold people responsible for failed / bad negotiations

They are some of the people who end up with some of these pensions

They should end up with a can of Friskie's
(sorry Friskie's, i'm sure you're good 'cause my cat likes your food)
 

GOLDBRIX

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while at the same time, claiming they are vastly overpaid with far greater compensation, pensions, and work rules compared to private industry.

Forty years ago the shoe was on the other foot.

Private Corporations had the better pay, FREE Medical, some had Free Life Insurance and GOLDEN PARACHUTES....

.Gov pay had to go up to draw workers, benefits were NEVER FREE, but retirement ( paid into) was in lieu of Pension Plans.
'87 Fed. .gov adjusted from CSRS to FERS. Pension was reduced, TSP (401K types with up to 5% match) installed, and paying into Soc. Sec. became a requirement. One check was reduced significantly and converted into three different sources; small pension, plus TSP withdrawal, plus SSI @ 65.

Private sector's pendulum swings back the other way Pension Plans evaporated in favor of 401K and that ilk, Some pensions went bankrupt and collected by .gov into the Pension Benefit Guaranty Corp., a federal agency that protects pension benefits in private-sector defined benefit plans( yeah some was awhole lot better than nothing), Pink slips fly like confetti, and CEOs keep their Golden Parachutes, as companies dissolved or merged. Workers got hurt the most.
"Fat Cats" got the name for a reason.

When you point your finger you have THREE pointing back
 

viking

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the_shootist

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TAKE this photo, imagine those being U.S. Federal Reserve Notes AND you need all that to buy ONE LOAF of BREAD:


That's why.
Nah, the Fed can make money appear from thin air. They do it every day! People buy houses with debt created out of thin air. They buy cars with just a signature and their debt is created....wait for it....out of thin air! You guys need to think more outside the box!
 

GOLDBRIX

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put them all on Social Security like the rest of us.
SSI was NEVER meant to be a Retirement Plan.
It was meant to supplement YOUR own retirement plan, hence the name "Supplement Insurance".
 

GOLDBRIX

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Nah, the Fed can make money appear from thin air. They do it every day! People buy houses with debt created out of thin air. They buy cars with just a signature and their debt is created....wait for it....out of thin air! You guys need to think more outside the box!

Feel FREE to wait for your "thin air" t_s.
Jus' Sayin'
 

the_shootist

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Feel FREE to wait for your "thin air" t_s.
Jus' Sayin'
Oh, I don't need any debt brother GB. I've put away a few shekels over the years so I'm sleeping pretty soundly at night. The Fed, working with the central bankers love creating debt for those folks who need a 'loan' for that hot new $48K SUV or their overpriced $850,000 colonial in the burbs. It's the only way the Fed keep this house of cards known as our economy from collapsing down around us. The bastards can keep it up for decades too! They're very good at it. They've been doing it all over the world for centuries and have been thrown out of 100 countries during that time. Nothing is forever and they're being more and more exposed at this point. Oy vey!
 
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Don't know about back in the 1920's when you were a kid, but here is a list of the 10 big boys as of 2010.

Link: The 10 biggest Failed Pension Funds

claims. Here’s a look at the 10 biggest pension failures ever turned over to the PBGC.



Firm and Year Terminated Total Claims Vested Participants Average Claim Per Person
1. United Airlines (2005) $7.4 billion 123,957 $60,033
2. Delphi (2009) $6.1 billion 69,042 $88,475
3. Bethlehem Steel (2003) $3.7 billion 91,312 $40,021
4. US Airways (2003) $2.8 billion 55,770 $49,337
5. LTV Steel (2002, 2003, 2004) $2.1 billion 83,094 $25,694
6. Delta Air Lines (2006) $1.6 billion 13,291 $123,473
7. National Steel (2003) $1.3 billion 33,737 $37,811
8. Pan American Air (1991, 1992) $0.8 billion 31,999 $26,285
9. Trans World Airlines (2001) $0.7 billion 32,263 $20,717
10. Weirton Steel (2004) $0.6 billion 9,410 $68,064
Top 10 Total $27 billion 543,875 $49,933
So 9 of the top 10 are airlines and steel companies. Wow!
 

GOLDBRIX

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Airlines - Due to Oil Prices / Fuel
Steel Cos. - Imported steel flooding US markets was cheaper.
 

viking

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SSI was NEVER meant to be a Retirement Plan.
It was meant to supplement YOUR own retirement plan, hence the name "Supplement Insurance".

I agree, put all politicians and government workers on it.
 

viking

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Airlines - Due to Oil Prices / Fuel
Steel Cos. - Imported steel flooding US markets was cheaper.
Many airlines just used the corrupt bankruptcy laws to dump their pension obligations. They were actually solvent, but found the PBGC a convenient way to reduce costs. The PBGC pays Pennies on the dollar, and will probably go bankrupt too.
 

gringott

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UPDATE:

I guess yesterday's protest wasn't up to all the hype and promotion over the weekend. The two streaming TV morning news programs I monitor for weather were promoting a march on Frankfort by teachers and other StateGov protestors over and over throughout the weekend. Most schools were closed Monday for Spring Break, and they claimed other schools closed in anticipation of teacher sick-outs. Monday morning they said buses were hired to bring in the protestors, and additional overflow parking at been arranged at the state capital for the influx of protestors.

I didn't get a chance to watch the blow by blow Monday on teevee, other than the morning pre-coverage.

Today, Tuesday, one channel had a report but it was combined with the report on the Oklahoma teacher protests, in fact, the vast majority of the report was about Oklahoma and only a tiny bit on the tail end was about the Kentucky protest. This channel tossed out a number "about 10.000" teachers and other StateGov protesters.

The other channel covered the voting in the Capital, did not directly even mention the protesters, other than saying the budget was passed despite shrill protesting during the process. No numbers, nothing. Keep in mind both channels had remote staff at the events, yet didn't show squat.

This all made me suspicious due to the heavy pushing of the agenda of the teachers beforehand. So I searched for information on the web. All the hits were coming up from the previous Friday's sickout. Finally, I found a Courier-Journal update, locally known as the Communist-Journal.

There was a bunch of non-fact based hyperbole at the beginning of the article. Digging deeper, I found a few facts.

"An estimated 3,000 protesters flooded the Capitol grounds, according to the Kentucky State Police, though other estimates put the crowd as high as 5,000."

So at best, half of the 10,000 stated by the one tv channel. The lead photo is blocky and a very narrow shot, here it is linked.



Note how low res it is, and how small the crowd actually is.

More FAKENEWS.

Oh, btw, the new budget will be taxing the few things they haven't taxed yet, including lawn care, vet services for small animals, an increase in tobacco taxes, etc. Literally, everything I pay a bill on is taxed, internet, phone, electricity, water, sewer, car insurance, homeowners insurance, not including sales tax. Example; homeowners extra $70 in tax, car insurance extra $30. Both purchased directly from out of state insurers.


Here is a better picture to judge crowd size from



Looks like at most a couple of thousand to me.

Does this look like ten thousand?

 

GOLDBRIX

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...an increase in tobacco taxes...
That targets Low Income People as that group usually has the highest rate of smokers.
NOTICE: Not a WORD on BEER, WINE and SPIRITS taxing. That would affect the politicians, Political Fat Cats, and Major contributors.
 

southfork

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Two things are certain in life, higher taxes and dying, at what juncture in time do higher taxes destroy whats left of the country.
 

FunnyMoney

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which misses the point,

I get it, you are trying to justify one portion of .gov, declaring separate and all that jazz,

Many would agree that some functions of .gov are legit,

while at the same time, claiming they are vastly overpaid with far greater compensation, pensions, and work rules compared to private industry.

mixing the 2 to obfuscate the issue, does not solve the problem at its base level,

Federal Reserve employees have an absolutely amazing pension plan. So does CONgress. No lack of funding there. They do believe they're more important than fire fighters, I'm sure.

Local, very local gov't is one thing. State and Fed level has always worn out its welcome.
 

searcher

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REVEALED: Oregon public university president receives a $76,111 A MONTH taxpayer-funded pension

  • Dr Joe Robertson retired as president of the Oregon Health & Science University in October last year
  • The 66-year-old is receiving a monthly taxpayer-funded pension of $76,111
  • His pension is considerably higher than what the average family in Oregon earns a year with the median household income being $57,532 in 2016
  • His high pension is a result of the Oregon Public Employees Retirement System
  • Pensions paid out by PERS are reportedly consuming other essential spending


Read more: http://www.dailymail.co.uk/news/article-5617901/Oregon-public-university-president-receives-monthly-76-111-pension.html#ixzz5ClB4fdNm
Follow us: @MailOnline on Twitter | DailyMail on Facebook
 

Mr Paradise

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Save up all your vacation & sick days for a couple years and then sell them back your retirement year increasing your ending salary which is what many pensions are based on. I've heard of workers padding their pension by up to 20% doing this strategy.
 

searcher

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Save up all your vacation & sick days for a couple years and then sell them back your retirement year increasing your ending salary which is what many pensions are based on. I've heard of workers padding their pension by up to 20% doing this strategy.
A lot of places are going to "use it or lose it."
 

Cigarlover

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How much longer can the private sector support the socialists in charge? It's their pension let them pay for it not me. I have to fund my retirement and theirs as well? Meanwhile they keep all their money, don't have to pay into SS and then retire with a uuuuuuges salary? If thats how its going to be, make the retirement age for state and federal employees, 85.
 

searcher

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More Absolutely Crazy Pension News
By: John Rubino
What happens next is also predictable: A growing number of pension plans will blow up as states and cities run out of cash, and the resulting chaos will lead the federal government to bail them out with another five-or-so trillion dollars of taxpayer money. Only this time around – with debt at every level of society twice or more as high as when the banks got their bailout — the result, especially in the currency markets, might be a lot less reassuring.
 

searcher

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The War Between Public Pensioners And Tax Donkeys Is Heating Up

by Tyler Durden
Fri, 04/20/2018 - 08:45


Authored by Charles Hugh Smith via OfTwoMinds blog,

The migration is only beginning, but that's only half the story.

You know it's serious when the newspaper of record finally reports it: A $76,000 Monthly Pension: Why States and Cities Are Short on Cash (New York Times).

It's a long article but the summary is brief: corrupt politicos promised the moon to public employees, and now the fiscal chickens of insolvency are coming home to roost.

Public pension obligations are rising so fast that even repeated tax increases can't keep up.

This is setting up a second front in the war between entitled Baby Boomers and younger taxpayers who pay most of the federal and local taxes. Public pensioners are a subset of the entitled Baby Boomers, but their pensions can't be paid with borrowed money like Social Security and Medicare; public pension obligations come out of local and state taxes, and as those obligations soar then public services must be slashed and taxes jacked up by annual double-digit increases.

So there is a war brewing between public pensioners and the Tax Donkeys: the Unprotected who pay local property taxes on their homes, state and local taxes on their incomes, sales taxes on their purchases, junk fees on local government services, and so on.

Corrupt politicos created the war by over-promising benefits to public employees and ignoring fiscal realities. By the time the bill comes due, the politicos who rubber-stamped the unaffordable promises are themselves gorging at the public-pension retiree trough.

Not every public employee is receiving gold-plated pensions and benefits, of course, but that doesn't negate the reality that nationally, public pensions are increasing faster than government revenues and the returns earned by the pension programs.

If the stock and bond markets suffer multi-year declines, even modest declines, the pension war will move from skirmishes to open political combat. The 2008-09 Global Financial Meltdown was a taste of the reality facing public pension programs: once annual returns slip from +7% annually to -7% annually, the pension plans are soon insolvent.

Like virtually all wars, there are asymmetries between the two combatants: in the war between public pensioners and the Tax Donkeys, the pensioners can't switch pension programs, but the Tax Donkeys can move to lower-tax states.

Allow me to summarize for those who aren't too squeamish: a lot of cities and counties are going to go broke, slashing services and jacking up taxes, all to no avail. The promises made by corrupt politicos cannot possibly be kept, despite constant assurances to the contrary, and those expecting services and taxes to remain untouched will be shocked by the massive cuts in services and the equally massive tax increases that will be imposed in a misguided effort to "save" politically powerful constituencies and fiefdoms.

These dynamics will power a Great Migration of the Tax Donkeys from failing cities, counties and states to more frugal, well-managed and small business-friendly locales. I've sketched out the migration in this graphic: the move by those who can from incompetently managed and/or corrupt cities/counties/states to more innovative, open, frugal and better managed locales.

Unlike Communist regimes which strictly control who has permission to transfer residency, Americans are still free to move about the nation. This creates a very Darwinian competition between sclerotic, corrupt, overpriced one-party-dictatorship states whose hubris-soaked political class is convinced the insane housing prices, tech unicorns, abundant services, and a high-brow culture ruled by an artsy elite are irresistible to everyone, and locales that are low-cost, responsive to the Tax Donkey class, welcoming to new small businesses, employers and talent, unbeholden to a politically-correct dictatorship and conservatively managed, i.e. not headed for insolvency, are no match for their elitist fiefdoms.

Not everyone can move. Many people find it essentially impossible to move due to family roots and obligations, kids in school, and numerous other compelling reasons.

Many people who are able to move are the Tax Donkeys who are paying the most taxes: self-employed entrepreneurs, mobile creatives, those with scarce skills and those who earn substantial incomes from royalties, patents and other forms of capital.

These Tax Donkeys can live pretty much anywhere they please. They don't need to stay in NYC, Boston, L.A., San Francisco or Chicago.



This is the model for many half-farmer, half-X refugees: people who are moving to homesteads or small towns with the networks and skills needed to earn a part-time living in the digital economy. In a lower cost area, they only need to earn a third or even a fourth of their former income to live a much more fulfilling and rewarding life.

Not that hubris-soaked politicos and elites have noticed, but only the top few percent of households can afford to own a home in their bubble economies. Paying $4,000 a month in rent for a one-bedroom cubbyhole in San Francisco may strike the elites living in mansions as a splendid deal, but to the people who have surrendered all hope of ever owning anything of their own to call home--not so much.




Though this chart is based on national data, there are many regional variations. When it takes a year just to obtain a permit to open an ice cream shop (in San Francisco), how much will the insolvent "owner" have to charge per ice cream cone to make up a year in hyper-costly rent paid for nothing but the privilege of being a scorned peon in a city ruled by privilege and protected fiefdoms?



Not that hubris-soaked politicos and elites have noticed, but the Tax Donkeys are getting fed up: their local schools have been stripped of enrichment programs, the cash-strapped local governments are demanding taxpayers pass $100 million bonds to fill potholes and repair schools' leaking roofs, parking tickets now cost more than a restaurant meal for the entire family, and the increases in fees and taxes are coming fast and furious.

If the real estate and stock/bond bubbles pop, the pension bubble pops, too. Once property taxes start declining even as rates are jacked up, the public pensioners will lose the war. Once the stock and bond portfolios of the pension programs are shrinking rather than growing, the the public pensioners will lose the war. Which American Cities Will File Bankruptcy Next?

There is a feedback loop to raising taxes to pay for skyrocketing public pension obligations: the higher taxes rise, the more Tax Donkeys will migrate away from high-tax states and cities. As those paying the majority of the taxes leave, the high-tax states and municipalities have no choice but to raise taxes even more aggressively, which only accelerates the migration of high-income, entrepreneurial Tax Donkeys that are the engines of growth.

The migration is only beginning, but that's only half the story: those who can't leave for whatever reason can opt out: close their businesses, quit their high-stress, high-paying job, move back to the family home, retire and start living as close to the ground as possible.

Those who opt out are in effect moving from those contributing the most to those contributing the least.

Right now, hubris-soaked politicos and elites can entertain the fantasy that NYC, Boston, LA, San Francisco, Chicago, etc., are irresistible: they're not. They're great for those feeding at the trough but not so great for those filling the trough. As astonishing as it will be to hubris-soaked politicos and elites, the straws that will break the back of the Tax Donkeys' will to put up with the ever-increasing burdens are many.

* * *

My new book Money and Work Unchained is $9.95 for the Kindle ebook and $20 for the print edition. Read the first section for free in PDF format. If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

https://www.zerohedge.com/news/2018-04-20/war-between-public-pensioners-and-tax-donkeys-heating
 

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The Looming Fiscal Nightmare of Extravagant Unfunded Pensions for State and Local Bureaucrats
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TAGS Big GovernmentLabor and WagesTaxes and Spending

04/20/2018Daniel J. Mitchell
Back in 2013, I shared a poll to see who people would pick as their “favorite political cartoonist.” Michael Ramirez currently has the lead, which doesn’t surprise me when you look at options (here, here, here, and here) I provided.
But if there was a prize for the most depressingly accurate political cartoon, he also would win the prize for his depiction of what happens when state and local politicians “negotiate” compensation packages for bureaucrats.


Simply stated, politicians have a giant incentive to provide lavish benefits to interest groups that then recycle some of the loot back to elected officials in the form of campaign contributions.
But the real key to the scam is that the bill gets imposed on future generations.
The American Legislative Exchange Council has a must-read report on the giant funding gaps that this has produced in the pension plans for state and local government bureaucrats.
If net pension assets are determined using more realistic investment return assumptions, pension funding gaps are much wider than even the large sums reported in state financial documents. Unfunded liabilities (using a risk-free rate of return assumption) of state-administered pension plans now exceed $6 trillion—an increase of $433 billion since our 2016 report. The national average funding ratio is a mere 33.7 percent, amounting to $18,676 dollars of unfunded liabilities for every resident of the United States. …the personal share of liability for every resident in each state, an indicator of the severity of the taxes to be borne now or in the future by each taxpayer for promises made but not funded. In Alaska, each resident is on the hook for a staggering $45,689, the highest in the nation. Connecticut, Ohio, Illinois, and New Mexico follow for the five highest per person unfunded pension liabilities.​
This map is the most important takeaway from the report. It shows which states have the highest per-capita unfunded liabilities.


I’m not surprised to see Alaska, Illinois, Connecticut, and New Jersey near the bottom of the rankings. All of them were choices in my poll on which state was “most likely to collapse.”
But perhaps New Mexico, Hawaii, and Ohio should have been on that list as well.
For further background on the issue, here are some passages from a pension primer published by Forbes.
Years ago, as an actuarial student, …I remember…first, the eye-popping idea that state constitutions promised state and local employees that they could keep their existing benefits, not just for past service accruals, but for all future years of employment; and, second, the notion that it was generally accepted for public plans to be un- or underfunded… this is the story that’s repeated over and over again. Pensions are made more generous — with high accrual rates, low retirement eligibility ages, generous cost of living provisions — as a means of providing more generous compensation to state and local employees, without actually needing to pay anything from the current year’s budget. Costs are deferred until well after current legislators have themselves retired. …pension debt is even worse than ordinary state debts, for instance, bond issues for building up infrastructure. Pension debt is nothing other than borrowing to pay for present-day employee salaries.​
In other words, bureaucrat pensions are a scam, an opportunity for politicians to buy off a powerful voting bloc today while imposing the bill on the future.
Bureaucrats are making out like bandits, as the New York Times recently reported.
A public university president in Oregon gives new meaning to the idea of a pensioner. Joseph Robertson, …who retired as head of the Oregon Health & Science University last fall, receives the state’s largest government pension. It is $76,111. Per month. That is considerably more than the average Oregon family earns in a year. Oregon — like many other states and cities, including New Jersey, Kentucky and Connecticut — is caught in a fiscal squeeze of its own making. Its economy is growing, but the cost of its state-run pension system is growing faster. More government workers are retiring, including more than 2,000, like Dr. Robertson, who get pensions exceeding $100,000 a year. The state is not the most profligate pension payer in America… “It’s an affront to everybody who pays taxes,” said Bruce Dennis, a retired carpenter from outside Portland who earned a $54,000-a-year pension by swinging a hammer for 45 years. No one gives him extra money.​
But there’s a problem with this scam.
As Margaret Thatcher famously noted, sooner or later you run out of other people’s money.
And we’re getting to that point, as illustrated by this article for the Wall Street Journal. It cites what’s happening on the state level in Connecticut.
Connecticut has just 31.7% of what it needs to pay its employees’ future retirement benefits, according to state financial reports. A fund for teachers has 52.3%.Together, that adds up to more than $37 billion in unfunded pension liabilities, or about $10,300 per Connecticut resident. Connecticut’s unfunded pension liabilities resulted from nearly 40 years of politicians making promises about benefits without adequately funding them, according to a 2015 study by the Center for Retirement Research at Boston College.​
And it gives an example of trouble at the local level from a city in Michigan.
East Lansing, home of Michigan State University…is struggling with almost $125 million in unfunded pension and retiree health-care liabilities, has been cutting services… East Lansing asked MSU to pony up $100 million over 20 years to help shore up the city’s underfunded pension plan. The alternative, the city said, was asking voters to approve a 1% income tax that would hit university employees and working students. After negotiations went nowhere, the city brought the income-tax proposal before voters in a referendum last November. …On Nov. 7, East Lansing residents shot down the income-tax referendum, forcing the city to debate what services to cut to save money for the pension obligations. …The city hopes to shed another 17 police and fire positions over the next two years… Altmann suggested a long list of potential cuts to make more room in the budget for increased pension payments: closing the fire station on MSU’s campus, shuttering the city’s pool, aquatic center, dog park and soccer complex, suspending bulk leaf pickup and plowing of public sidewalks and ending annual jazz, folk, film and art festivals.​
This is not going to end well.
And the problem seems to get worse every year.


Doesn’t matter who is slicing and dicing the data. The numbers always look grim.
When the next recession hits, many of these simmering problems are going to explode.
P.S. In addition to extravagant and unfunded pensions, don’t forget that state and local bureaucrats (and their federal cousins) are overpaid.
P.P.S. And if you don’t believe that they’re overpaid, then please explain why they don’t voluntarily leave their jobs for positions in the economy’s productive sector?
P.P.P.S. Also keep in mind that there are negative macroeconomic repercussions when bureaucrats are overpaid.
Originally published at International Liberty.
Daniel J. Mitchell is a top expert on fiscal policy issues such as tax reform, the economic impact of government spending, and supply-side tax policy. He holds a Ph.D. in economics from George Mason University. His blog is Liberty – Restraining Government in America and Around the World.
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