The 16 States That are Killing Their Pensions: 24/7 Wall Street

24/7 Wall St.:

For decades, public employees have had pension plans identical to those provided by most large American companies. These are defined benefit plans that pay workers a fixed sum each year after they have retired based on the amount of years they have worked and their salaries at the time of retirement. The trouble this causes for governments is that these funds often do not grow as quickly as the obligations they have to pay out, creating a budgetary crisis. It is not unusual to for a plan to have an obligation to offer its members a guaranteed level of growth which allows retirees to be able to rely on future payments, no matter how the funds perform financially. During a period like the market collapse of 2008,  the value of many large pension funds plunged.  Pension fund obligations also crippled many large corporations such as General Motors so badly that they filed for Chapter 11 bankruptcy to escape their obligations.

Read the whole story: 24/7 Wall St.

Comments

[Counterglow]

01:30 AM on 03/08/2011

Where were these g00fs with the signs when Bush was destroying the US economy? It wasn't as though he did it in secret.

[usamade]

10:28 AM on 03/07/2011

"The well is running dry" because the pensions were invested and lost in the stock market. The pensions were also stolen from law makers and used for other things and now the well is dry. so whose fault it that? No the pensioner.

[Cash4Gold]

09:18 AM on 03/07/2011

the picture says it all. the mythical taxpayer, because you know I don't pay taxes and if I did then I would not want them to go to social programs.

[MIKEBC]

08:33 AM on 03/07/2011

The well is running dry because of 2 republican wars and republican tax cuts for the super rich!

[Spiffy1]

12:12 PM on 03/07/2011

The rich are contributing a far higher percentage of all revenues than they did prior to the GWB cuts.

[TheCommons]

11:42 PM on 03/07/2011

What you say may be true. But their income tax rates are at their lowest in decades and have been trending down since the Reagan years. Perhaps you want people to believe that the rich are having their income practically confiscated. But nothing could be further from the truth. That's how you lie with statistics.

[funkalicious]

08:13 AM on 03/07/2011

The total unfunded pension obligation for government workers is 3 TRILLION DOLLARS country wide. This is an unreasonable level of liability and it needs to be addressed.
Bernakes QE is being erased with 5 dollar a gallon gasoline.

Vote Seeking politicians made unreasonable promises over the years. We are also guaranteeing Teamster Pensions etc. The private sector jobs have moved to a a defined pay in system of 401k's and 403b's and IRA's etc.. non of which come with a guarantee, all of the metrics of college tuition's or other so called progressive measures of paying tax do not factor in these benefits or lack of guarantee.

The system is in need of repair. The sooner the Unions and the government workers and the taxpayers agree we need viable win win solutions the sooner we can put the country back on track. The current system is unsustainable and places America in an untenable non competitive situation with no clear way forward to build a national healthcare system with the current pension system in place.

[Mexeconomia]

03:47 AM on 03/07/2011

Problem with gvmnt unions is that they have no checks and balances... Private businesses if they go broke their pension plans are cut. Ie the airline workers had to reduce pensions after bankruptcies. If a state or county is bankrupt then they should be able to reduce benefits among other payables...

[Mr Hankey]

03:37 AM on 03/07/2011

The picture with this headline shows the "dumbing down" of America in action.

1 - Union workers pay taxes too.
2 - Maybe the union workers should consider if these two old folks deserve their social security and medicare benefits.

[Warren Peace]

09:33 PM on 03/06/2011

The world has changed and you guys don't even know it. You all ready lost before the ink dried on your picket signs. just like other times in history when progress came a calling there was a concentration of dissent but the rest of the world accepted it and moved on. The changes that are happening now was put into place decades ago. When you realize what you do now will effect the only the future, not the present then you can make positive changes. Today, get use to being screwed from what your parents voted or didn't vote for, changed or didn't change.

[MIKEBC]

08:35 AM on 03/07/2011

I bet the guy holding the running dry sign has no problems with the two bush wars that are bankrupting us.

[drlouise]

08:36 PM on 03/06/2011

Yep. Give all the money to the Koch bros. They really need more retirement.

[Sigger]

08:03 PM on 03/06/2011

What you didn't see at the bottom of the signs was "I'm stupid, I don't have a funded pension". Their taxes won't change 2 cents a year, but they want to take something away from other middle class Americans, so that everyone will live in retirement poverty, while giving the rich billions in tax cuts.

republicans are trying to destroy this country while preaching the wrath of God, and being wrapped in the US flag - isn't that what they've been saying was going to happen all along?

[nypapajoe]

07:40 PM on 03/06/2011

That's the answer you idiots put more people out of work and out into the streets! We have become a third world country just walk the sreets and observe the empty houses, closed mom and pop shops, businesses closing their doors and people begging on the streets! All while the conservatives continue their planned demise of the common person! How Patriotic, how American! We have lost our civility in the name of corporate mandates and most of all GREED!

[omobob]

05:10 PM on 03/06/2011

The promise was that all that money they were taking from our pay checks would one day pay us back? Now the are reneging on their promise and folks who were counting on that money to live are in trouble now. Wall St. will soon hand out another round of obscene bonuses while the Middle Class goes under.

[Bat Masterson]

06:28 PM on 03/06/2011

public employees used very little of their money and more of the tax payer for their pensions

[VotingPresent]

06:59 PM on 03/06/2011

In WI it is all taxpayer money.

[lipps]

11:43 PM on 03/06/2011

Alot of the public employees also got an exemption for paying in to Socialist security for many years... Now that the Dems have raided and spent the lockbox SS funds... Everything looks good for the Government Unions.

[Danlar]

04:49 PM on 03/06/2011

Start a ROTH IRA NOW with a good discount broker invest in index funds, REITs, Bonds you will never pay taxes on your cash and it will be there for you to manage YOURSELF

....it's a YOYO economy...YOU'RE ON YOUR OWN!

[Its-All-Good]

03:22 PM on 03/06/2011

Looks like we have a predictable spiraling conundrum.. we will burn one way or another.. but it's how we rise like the Phoenix from the ashes that will be the major tell.. The banksters created this but none will walk.. as they know too much..

[desertman]

03:31 PM on 03/06/2011

The housing crisis drained the swamp. When the whirlpool of deflation started we uncovered various Ponzi schemes like Madoff, etc as well as unsustainable public sector unions.

[ProudAmericanLiberal]

04:38 PM on 03/06/2011

It didn't start with the housing crisis. The recession was already well under way when the housing crisis hit. Slick housing loans would never have sold if people had jobs.