Kiss It Goodbye: 150 Pensions Under Water
Some 150 state and local pension funds reported assets under $3 trillion to cover the estimated $4.1 trillion needed to pay benefits.
John W. Schoen
CNBC.com
Thursday, 25 Jun 2015
When it comes to the recent improvement in state finances, one retiree’s pain is another one’s gain.
More than five years after the Great Recession tore a giant hole in their budgets, most states have made big progress in stabilizing their finances.
That’s good news for millions of state taxpayers and the millions of investors who hold state-issued municipal bonds—many of whom are retirees that depend on them for a steady stream of safe income.
But the improved fiscal health owes much to a wave of cuts that have whittled away at pension benefits for current and future retirees.
“Nearly every state since 2009 enacted substantive reform to their retirement programs—including increased eligibility requirements, increased employee contributions reducing benefits, including suspending or limiting cost-of-living increases,” said Alex Brown, research manager at the National Association of State Retirement Administrators.
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