Public Employee Retirement Uncertain Future

Public Employee retirement failureIf you are employed by a state, or municipality pay attention.  Everything your pension has counted on for years to pay you when you retire isn’t working anymore.

As if American retirees need another risk to worry about but now a research organization is forecasting that up to 85 percent of all public pension plans could fail in the next 30 years.

If you are like most retiree’s, your pension is your Freedom and your key to sustaining your life until the end. However, the fact that pension plans are facing serious challenges should be no surprise.

The good retirement plans known as “defined benefit plans” have been closing up for years leaving employees with 401k plans were there is generally no guarantee of any retirement benefit.

The Problem

During the 1990’s the bull market raged on and actuaries who determine how much money was needed to fund public employee retirement pensions used historical rates of return. As we now know from the financial crisis, those who used the past to determine their future retirement income were sorely disappointed. During the last decade millions of retirees lost their retirement savings.

Because of the aggressive rates of return those actuaries used in their funding assumptions, there is a large unfunded liability that exists in the public pension plan system.

Add this together with the bigger picture of the unfunded government liabilities of social security, medicare and the mystery of what Obamaceare will really cost, Americans need to button down the hatches.

You can read the full article on the unfunded public pension crisis at USA Today.




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