Tuesday, August 6, 2013

Pensions - An example of government promising more than it can deliver.

This story points out the problems facing Detroit, including unfunded pension promises, are on the horizon for other cities and states.

Looks like another example of government and politicians promising more than they can deliver, failing to live within their means.
Detroit, you're not alone.

Across the nation, cities and states are watching Detroit's largest-ever municipal bankruptcy filing with great trepidation. Years of underfunded retirement promises to public sector workers, which helped lay Detroit low, could plunge them into a similar and terrifying financial hole.

A CNBC.com analysis of more than 120 of the nation's largest state and local pension plans finds they face a wide range of burdens as their aging workforces near retirement.

Thanks to a patchwork of accounting practices and rosy investment assumptions, it's not even clear just how big a financial hole many states and cities have dug for themselves. That may soon change, thanks to a new set of government accounting standards that could serve as a nasty wake-up call to states and cities relying on rosy scenarios and head-in-the-sand accounting.
 Minnesotans at 78% is slightly the level of 80% the story says is a well funded pension program.

No comments: