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Title: Study: States Must Fill $1 Trillion Pension Gap
Source:
Associated Press
URL Source: http://www.sfgate.com/cgi-bin/artic ... l/a210116S43.DTL#ixzz0fuMJViLL
Published: Feb 18, 2010
Author: Associated Press
Post Date: 2010-02-18 12:09:07 by Brian S
Keywords: None
Views: 225
Comments: 40
(02-18) 06:16 PST Harrisburg, Pa. (AP) -- States may be forced to reduce benefits, raise taxes or slash government services to address a $1 trillion funding shortfall in public sector retirement benefits, according to a new study that warns of even more debilitating costs if immediate action isn't taken. The Pew Center on the States released a survey Thursday of state-administered pension plans, retiree health care and other post-employment benefits in all 50 states that blamed a decade's worth of policy decisions for leaving them shortchanged. The result for some states will be "high annual costs that come with significant unfunded liabilities, lower bond ratings, less money available for services, higher taxes and the specter of worsening problems in the future," the study said. The cost of the trillion-dollar shortfall, which will be paid over the coming decades, is about $8,800 for each American household. The study did not include many city, county and municipal pension plans, which are thought to have similar underfunding. "We have a significant problem now, but it's a problem that can be solved by taking relatively modest steps," said Susan K. Urahn, the center's managing director. "If they don't do anything, if they wait, eventually they will have an unmanageable crisis on their hands." As of 2008, states had $2.4 trillion to meet $3.4 trillion in promised pension, health care and other post-retirement benefits, according to the report. The true gap may even be wider, because the study did not account for the full impact of investment losses in late 2008, during the stock market downturn, and because many plans employ multiyear smoothing techniques to lessen the effect of a single year's losses. But more recent stock market returns could help — on Wednesday, for example, Pennsylvania's $47 billion public school pension plan reported it had earned about 12 percent on investments in the 2009 calendar year. Pew deemed 16 states solid performers in how they fund pensions, 15 needing improvement and 19 considered to be facing serious concerns. "Meanwhile, more and more baby boomers in state and local government are nearing retirement, and many will live longer than earlier generations — meaning that if states do not get a handle on the costs of post-employment benefits now, the problem likely will get far worse, with states facing debilitating costs," the study said. The exploding financial burden could be a bitter pill for taxpayers, many of whom will not be collecting similar pensions or other benefits when they retire, said David Kline with the California Taxpayers' Association. About one in five private sector workers have traditional defined benefit pensions, compared with about 90 percent of public-sector employees — including some that do not get Social Security. "Taxpayers in the future will be paying for people who worked decades before they may have even lived in the area or begun paying taxes, because the obligation for these benefits is just snowballing," Kline said. The study graded states on how well they have managed employees' retirement benefits. Florida, Idaho, New York, North Carolina and Wisconsin began the current recession with fully funded pension systems, while eight states have left more than one-third of their pension liability unfunded. Illinois was rated the most troubled pension system during the study period, with a 54 percent funding level and a total liability of more than $54 billion. In Pennsylvania, a series of decisions by the Legislature and governor have shielded taxpayers from much of the pain for the past decade, but costs of less than $1 billion a year now is projected to climb to about $6 billion annually in the coming three years. The report said policy makers have exacerbated the problem by expanding benefits, relying on overly optimistic assumptions about investment returns and failing to sufficient fund the programs. "Even though the actuaries tell the states what they should be doing, the states feel free to ignore that," said Olivia Mitchell, director of the Pension Research Council at the University of Pennsylvania's Wharton School. "So putting some teeth behind the requirements is really the problem." Pew calculated a $587 billion national cost for current and future retiree health care and other nonpension retirement benefits, with only about 5 percent of that amount funded as of 2008. The cost of health care and the number of retirees are both on the rise, adding to the pressure on states. The study found that 15 states made some legislative changes to their state-run systems last year, 12 did so in 2008 and 11 in 2007. About a third of states had formal efforts to study potential reforms under way last year. "Pension plans work when they are allowed to work, and part of that dynamic is that sometimes adjustments have to be made," said Keith Brainard, research director with the National Association of State Retirement Administrators. "It's important not to take away decent retirement benefits for some of the few people that have them." Pew said states should consider changes that have proven to be effective and politically viable. Among them: setting minimum contribution levels that are actuarially sound, sharing some of the investment risk with employees, cutting benefits, increasing the minimum retirement age, making employees pay more into the system and providing more robust oversight and investment rules. Mitchell said many states have constitutional prohibitions against lowering employee pension benefits, but health care programs can more easily be altered.
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#1. To: Brian S (#0)
Cut spending. You don't need a 'panel' to note the obvious. You need a 'panel' to CYA yourself and your political party. That applies to Dems and Repubs alike.
my anti groupie can't get through life without me.
Fine. What to cut? I posted CBO data that showed non defense discretionary spending had gone up less than 10%. So let;s assume you cut that. What's next?
The fact I was an RM2 escapes you obviously, and what that implies. Badeye posted on 2007-01-30 16:42:29 ET Reply Trace One of my buddies was recently extolling the virtues of Sarah Palin and the tea-parties, he took early retirement in his 50's from his government job and now spends his time volunteering for tea party events. I can't wait to send this to him.
Being a Republican means you get to choose your own reality.
The problem, as I've told you before, is that most who want spending cut, don't actually want spending cut. Have a read: http://www.forbes.com/2009/09/17/federal-budget-spending-opinions-columnists-bruce-bartlett.html
Being a Republican means you get to choose your own reality.
You've told 'me' nothing of the sort, but whatever. Bottom line is Owe-Bama doubled the deficit, knows he's in political trouble, and doesn't have the balls to stop the faux stimulus spending, or veto the next Pelosi designed budget.
my anti groupie can't get through life without me.
Bottom line is Owe-Bama doubled the deficit, knows he's in political trouble, and doesn't have the balls to stop the faux stimulus spending, or veto the next Pelosi designed budget. You know, saying the same lie over and over again doesn't bring it any closer to being true.
Being a Republican means you get to choose your own reality.
I'd say that would leave a mark but where would you put it?
The fact I was an RM2 escapes you obviously, and what that implies. Badeye posted on 2007-01-30 16:42:29 ET Reply Trace Tell that to Owe-Bama. The deficit doubled in his first year. It was 700 billion when Bush left office. Its now 1.4 trillion. Man up, he's your messiah.
my anti groupie can't get through life without me.
I posted CBO data that showed non defense discretionary spending had gone up less than 10%. So let;s assume you cut that. What's next? Yeah, isn't that funny, NDS jumped like 20% last year and now they want to freeze it. Well, we could start cutting where Obama PROMISED he was going to cut. How about that for a start?
Goldi-Lox: You're one dumb-fucking bitch.
Man up, he's your messiah. Bush's last year's budget was $496B I thought.
Goldi-Lox: You're one dumb-fucking bitch.
What is NDS?
The fact I was an RM2 escapes you obviously, and what that implies. Badeye posted on 2007-01-30 16:42:29 ET Reply Trace when it was submitted pre-TARP etc etc etc...
The fact I was an RM2 escapes you obviously, and what that implies. Badeye posted on 2007-01-30 16:42:29 ET Reply Trace I've seen 496 - 800 billion. The most used number is 700 billion. The Washington Post, hardly a haven for Bush or Conservatives, puts the Owe- Bama deficit at 1.4 TRILLION. Go65 thinks they are lying, apparently the WaPo is a 'conservative newspaper' in his world...I wonder what color the sky there is...lol
my anti groupie can't get through life without me.
They're public employees. Just leave what is ever in their pensions and divide by the number of government employees. Works for the rest of private company America, I don't see why these public employees should be any different.
Goldi-Lox: You're one dumb-fucking bitch.
No. FY 2008 ended at 496Billion. Obama took FY 2009 and added 800B to whatever was in the Bush 2009 budget.
Goldi-Lox: You're one dumb-fucking bitch.
Maybe somebody was adding TARP money to it. bottom line is this administration and congress doubled, at the very least, a deficit that caused many who voted for Bush twice to abandon him.
my anti groupie can't get through life without me.
Reality check: The actual deficit was about $1.7 trillion, mostly due to declining revenue.
Being a Republican means you get to choose your own reality.
http://www.cato-at-liberty.org/2...a-for-bushs-2009-deficit/ Being a Republican means you get to choose your own reality.
Oh, that makes it okay then...(eyes rolling)
my anti groupie can't get through life without me.
...by the Nancy Pelosi led, Democrat Controlled, US House of Representatives. Note it doesn't say 'Bush created the budget and deficit' just 'Bush was in the White House'. Speaker PELOSI and the Democrats created the budgets for 2007, 08,09 and 2010. There is no spinning it.
my anti groupie can't get through life without me.
So? Obama added enormously to FY2009. How it's "bush's fault" is beyond me when Obama was president.
Goldi-Lox: You're one dumb-fucking bitch.
Obama and the Dems attacked Bush for the increasing Budget deficit of 2008. Why didn't they, or why don't they, submit a balanced budget to show they can do it?
Goldi-Lox: You're one dumb-fucking bitch.
Why didn't they, or why don't they, submit a balanced budget to show they can do it? For the same reasons that the GOP won't submit specific spending cuts and has run away from Paul Ryan's budget - it's political suicide. Case in point - the GOP has attacked Obama for proposing cuts in Medicare and has vowed to protect Medicare from any cuts. The GOP just voted AGAINST a commission to propose cuts that they used to support. So defense is off the table, medicare is off the table, interest is off the table, and nobody is going near social security. What's left is about $700 billion that funds everything from roads, to the FAA, to the CDC. Even if you eliminated it entirely, you still have a deficit. Everyone wants to cut spending, but nobody actually wants to cut spending.
Being a Republican means you get to choose your own reality.
Not true, Obama added about $300 billion on top of what Bush had already proposed.
Being a Republican means you get to choose your own reality.
And George W. Bush. When are you going to admit that?
Being a Republican means you get to choose your own reality.
Not true, Obama added about $300 billion on top of what Bush had already proposed. NOpe, updated figures ad another $75 billion to the $785 Billion of his "Stimulus". And Obama gave AIG another $125 billion bailout.
Goldi-Lox: You're one dumb-fucking bitch.
When are you going to admit that? I will be the first registered Republican to admit Bush was an idiot for acting like a liberal. There, is that good enough for you?
Goldi-Lox: You're one dumb-fucking bitch.
Works for the rest of private company America, I don't see why these public employees should be any different. Indeed. I'm with you on this one...
He acted like a Republican and most of those who claim to be Conservative. Reagan grew government too.
Being a Republican means you get to choose your own reality.
The Stimulus was over two years.
Being a Republican means you get to choose your own reality.
Democrats are in total control of the government. Where's the spending cuts from THE CURRENT DEMOCRAT CONTROLLED GOVERNMENT? You know I was 100% against the spending hikes after 2004. Stop pretending otherwise. Bush isn't President. Owe-Bama is. The Republicans don't control the House. Democrats do. The GOP doesn't control the Senate, DEMOCRATS DO. This level of spending is NOT SUSTAINABLE. When are the DEMOCRATS GOING TO CUT SPENDING?
my anti groupie can't get through life without me.
When was the filibuster abolished in the Senate? I must have missed that news. And when were rules changed so a President didn't have to sign a bill into law? I must have missed that as well. It's a good thing though that Bush and the GOP didn't implement any massive new unfunded liabilities when they had control of the government, right?
Being a Republican means you get to choose your own reality.
Let's see, the CBO scoring of the Health Care Reform bill says "The bill would also lower the deficit by $127 billion over the next decade -- "going further than any other bill" -- and by $650 billion during the decade after that, according to the aide." So the GOP should support this, right?
Being a Republican means you get to choose your own reality.
(laughing) So, the Democrats excuse when they had 60 votes making them filibuster proof was what, exactly? And the fact is if they can't convince one of the two Ditzy Twins in Maine to side with them...sorry that dog just doesn't hunt. Democrats have vast majorities throughout the Federal Goverment, and they can't get THEIR OWN party members on board. Its laughable you try to blame the GOP. Moreover, its not working with the voters, and the polls all agree on it across the board when the topic is the DEMOCRAT CONTROLLED CONGRESS.
my anti groupie can't get through life without me.
When are the DEMOCRATS going to cut spending? They are in the clear majority. In the House, where spending is controlled by the Constitution, there is NO EXCUSE. Nobody believes this monsterous take over of the American Healthcare System will result in 'savings'. When are the Democrats going to cut spending? Voters are watching, and are not impressed by trying to hide behind the current minority.
my anti groupie can't get through life without me.
I already gave you one example. Again, we have the Democratic plan to reduce health care spending and cut the deficit versus the GOP pledge to block all Medicare cuts and their history of drastically expanding Medicare. And you keep arguing that the GOP approach to spending in preferable?
Being a Republican means you get to choose your own reality.
Again, repeating a lie over and over again doesn't make it true.
Being a Republican means you get to choose your own reality.
When are the Democrats going to cut spending?
my anti groupie can't get through life without me.
What lie? When are the Democrats going to cut spending?
my anti groupie can't get through life without me.
When are the democrats going to cut spending?
my anti groupie can't get through life without me.
#2. To: Badeye (#1)
Cut spending.
#3. To: Brian S (#0)
#4. To: Badeye (#1)
(Edited)
#5. To: go65 (#4)
#6. To: Badeye (#5)
You've told 'me' nothing of the sort, but whatever.
#7. To: go65 (#6)
You know, saying the same lie over and over again doesn't bring it any closer to being true.
#8. To: go65 (#6)
#9. To: war (#2)
What to cut?
#10. To: Badeye (#8)
Tell that to Owe-Bama. The deficit doubled in his first year. It was 700 billion when Bush left office. Its now 1.4 trillion.
#11. To: Nebuchadnezzar (#9)
NDS jumped like 20% last year
#12. To: Nebuchadnezzar (#10)
Bush's last year's budget was $496B I thought.
#13. To: Nebuchadnezzar (#10)
#14. To: Brian S (#0)
#15. To: Badeye (#13)
#16. To: Nebuchadnezzar (#15)
#17. To: Badeye, Nebuchadnezzar (#16)
On Jan. 7, the Congressional Budget Office (CBO) estimated that the federal budget deficit for this fiscal year (October 2008 to September 2009) would be $1.2 trillion. But the CBO estimate only counted the $68 billion approved for the wars in Iraq and Afghanistan, when they actually cost more than $186 billion in 2008. Given that the wars will cost at least another $100 billion, the federal budget deficit will be $1.3 trillion, or even more if the economy worsens more than expected. This estimated deficit is almost 10% of the Gross Domestic Product (GDP), which measures the value of all the goods and services* produced in the United States in a year, and would be the biggest deficit since World War II.
#18. To: Nebuchadnezzar, badeye (#15)
(Edited)
Listening to a talk radio program yesterday, the host asserted that Obama tripled the budget deficit in his first year. This assertion is understandable, since the deficit jumped from about $450 billion in 2008 to $1.4 trillion in 2009. As this chart illustrates, with the Bush years in green, it appears as if Obama’s policies have led to an explosion of debt.
. . . But there is one rather important detail that makes a big difference. The chart is based on the assumption that the current administration should be blamed for the 2009 fiscal year. While this makes sense to a casual observer, it is largely untrue. The 2009 fiscal year began October 1, 2008, nearly four months before Obama took office. The budget for the entire fiscal year was largely set in place while Bush was in the White House.
#19. To: go65 (#17)
The actual deficit was about $1.7 trillion, mostly due to declining revenue.
#20. To: go65 (#18)
The chart is based on the assumption that the current administration should be blamed for the 2009 fiscal year. While this makes sense to a casual observer, it is largely untrue. The 2009 fiscal year began October 1, 2008, nearly four months before Obama took office. The budget for the entire fiscal year was largely set in place while Bush was in the White House.
#21. To: war (#12)
Bush's last year's budget was $496B I thought.
#22. To: go65 (#17)
The actual deficit was about $1.7 trillion, mostly due to declining revenue.
#23. To: Nebuchadnezzar (#22)
Obama and the Dems attacked Bush for the increasing Budget deficit of 2008.
#24. To: Nebuchadnezzar (#21)
So? Obama added enormously to FY2009.
#25. To: Badeye (#20)
..by the Nancy Pelosi led, Democrat Controlled, US House of Representatives.
#26. To: go65 (#24)
So? Obama added enormously to FY2009.
#27. To: go65 (#25)
And George W. Bush.
#28. To: Nebuchadnezzar (#14)
They're public employees. Just leave what is ever in their pensions and divide by the number of government employees.
#29. To: Nebuchadnezzar (#27)
I will be the first registered Republican to admit Bush was an idiot for acting like a liberal.
#30. To: Nebuchadnezzar (#26)
NOpe, updated figures ad another $75 billion to the $785 Billion of his "Stimulus".
#31. To: go65 (#30)
#32. To: Badeye (#31)
Democrats are in total control of the government.
#33. To: Badeye (#31)
When are the DEMOCRATS GOING TO CUT SPENDING?
#34. To: go65 (#32)
When was the filibuster abolished in the Senate? I must have missed that news.
#35. To: go65 (#33)
#36. To: Badeye (#35)
When are the DEMOCRATS going to cut spending?
#37. To: Badeye (#35)
They are in the clear majority. In the House, where spending is controlled by the Constitution, there is NO EXCUSE.
#38. To: go65 (#33)
#39. To: go65 (#37)
They are in the clear majority. In the House, where spending is controlled by the Constitution, there is NO EXCUSE. Again, repeating a lie over and over again doesn't make it true.
#40. To: go65 (#25)
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