Monday, October 03, 2016

How You Will Bail Out 
State Pension Systems
Forbes article highlights the potential for private sector workers to bailout broke government pension systems .. "Across America, state and local government employee pension systems report unfunded liabilities of $1 trillion. But, this calculation rests on very dubious assumptions that the annual investment earnings of these funds will be as high as 8 percent annually. Few state-run retirement systems have seen consistently high earnings returns. If the investment returns are closer to reality, say, 3 percent per year, the $1 trillion liability rises to $4.83 trillion, an average of $41,219 per household." .. why are government pension systems broke? - "Politicians like to promise benefits for government employees in return for election support; politicians don’t like to ask those same employees for higher employee contributions to their own retirements; when times are tough, politicians are tempted to cut back payments into the retirement systems they oversee; and, when times are good, they’re also tempted not to put in money as the investment returns bounce back. The net result is that most state and local pension systems are woefully underfunded." .. how is the government proposing to fix the problem? - "The U.S. Labor Department has issued a rule pressuring states and large local governments into offering government-run retirement plans for private sector workers."
LINK HERE to the article

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