Pension Problems
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What to Know: Public employee pension systems are heading for disaster.
“The cold, hard accounting tells us that some will face financial hardship when their government employers are unable to pay what’s been promised,” writes Tracy C. Miller for RealClearPolicy.com. “The sooner states act on pension reform, the fewer promises will be broken. Most state pension plans, including Maryland’s, have large unfunded liabilities. State governments have not been contributing enough each year to cover the cost of benefits owed to workers later on in retirement (given reasonable expectations of what the money invested by their pension funds will earn between now and then).”
The TPPF Take: Cities, counties and states must get control of their pension liabilities.
“The Teacher Retirement System’s pension debt grew to $35.4 billion in Oct. 2018, revealing a huge chasm between the promises made and the ability to keep them,” says TPPF’s James Quintero. “This is yet another reminder of the inherent instability and unsustainability of the defined benefit system—and the need to convert to a defined contribution system.”
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