Pension Fund Ultimatum: A Haircut Looks Better Than a Beheading
July 26th, 2011
Millions of Americans believe they’re sitting pretty with their pensions funds, 401(k) retirement plans and medical benefits. But, as we’ve written previously on numerous occasions, pensions are anything but safe.
We’re starting to see the coming pension wipe out creep up in smaller cities, and you can be assured that this will spread like wildfire as local, state and federal governments that have over committed funds and underestimated economic growth and tax revenue struggle to stay in the black.
The latest example comes to us from Central Falls, Rhode Island, where the city government has basically told pensioners that they can either voluntarily agree to pension benefits cuts of 10% to 50%, or face the possibility of a total wipe out of their retirements if the city goes bankrupt: