Wednesday, March 04, 2009

Underfunded public pension funds may soon face day of reckoning

From Bloomberg News, by David Evans:

Public pension funds across the U.S. are hiding the size of a crisis that’s been looming for years. Retirement plans play accounting games with numbers, giving the illusion that the funds are healthy.

The misleading numbers posted by retirement fund administrators help mask this reality: Public pensions in the U.S. had total liabilities of $2.9 trillion as of Dec. 16, according to the
Center for Retirement Research at Boston College. Their total assets are about 30 percent less than that, at $2 trillion.

With stock market losses this year, public pensions in the U.S. are now underfunded by more than $1 trillion.

I estimate that Cheshire's defined benefit pension plans are currently underfunded by approximately $20,000,000.

Tim White

No comments: