US Public Pensions Face $2,000bn Shortfall

[Purveyor]

Source: Financial Times

By Francesco Guerrera and Nicole Bullock in New York

Published: January 4 2010 23:01 | Last updated: January 4 2010 23:01

The US public pension system faces a higher-than-expected shortfall of more than $2,000bn that will increase pressure on many states’ strained finances and crimp economic growth, according to the chairman of New Jersey’s pension fund.

The estimate by Orin Kramer will fuel investors’ concerns over the deteriorating financial health of US states after the recession. “State and local governments are correctly perceived to be in serious difficulty,” Mr Kramer told the Financial Times.

“If you factor in the reality of these unfunded promises, their deficits will rise exponentially.”

Estimates of aggregate funding requirement of the US pension system have ranged between $400bn and $500bn, but Mr Kramer’s analysis concluded that public funds would need to find more than $2,000bn to meet future pension obligations.

A shortfall of that size could force state governments to take unpalatable decisions such as pouring more public money into their funds or reducing pension benefits. State and local governments have already cut spending to close budget deficits.

Read more: http://www.ft.com/cms/s/0/bd1c2552-f966-11de-8085-00144feab49a.html?nclick_check=1

[avaistheone1]

1. Who cares.

We have got all our wars going on. What more do you want?















:sarcasm:

[DJ13]

2. Its either pensions or a second mansion for a Wall Street exec

I wonder which is more important to our government.

[Thothmes]

3. Depends on what is more important to State and Municipal

Governments. They are the ones with the outstanding retirement liabilities.

[Mika]

4. George W Bush: "It's yer money. He he he"

---

[Iowa]

5. So bail them out...

The people who rely on these pensions are infinitely more deserving of a bail-out than bankers.

[w4rma]

6. Apparantly pensions are being used as Ponzi Schemes. Don't be the last one holding the bag. (nt)

[dysfunctional press]

7. a lot of us will probably get to witness a total finacial meltdown in our lifetimes...

:woohoo: