Pensions: Be Careful of Government Involvement

The shortfall in retirement funds for American families is about $4 trillion.  Much of that gap is attributable to the demise of defined benefit pensions. Some government plans may help ease the shortfall, but they carry dangers of their own. Few employees are active in a defined benefit pension plan, which means that, for a […]

Retirement Disasters Paid From Your Pocket

For some state and local governments, the weight of retirement obligations is oppressive. To avoid confessing to a complete disaster, they usually decide to cut benefits available to future employees, because governments can less readily rescind retirement benefits of workers who have already retired. This reduction in promised retirement income happens often enough that the […]

Underfunded Retirement Plans May Sink Us All

As we wriggle out from the worst recession in about 70 years, unfunded state and local pensions, and federal egos, could trigger the next financial calamity. The Congressional Budget Office estimated in 2011 that states and local government owed $2-3 trillion in unfunded pension liabilities for government employees. One state and one city at a […]

Generational Theft: Some Deficits Hurt Young Workers the Most

What do the national debt, Social Security, and many defined benefit pensions have in common? No one expects the citizens of one generation to pay their own way. In recent years, only part of current federal spending is covered by current tax collections – the rest is funded from borrowed money that future generations are […]

The Looming Retirement Income Debacle

Many Americans are anxious as they contemplate retirement. While we might hope with optimism, reality paints a gloomy picture.  The average Social Security retirement benefit is $1,301 per month, basically the poverty level, and it is too small for a comfortable retirement. Relatively few Americans will retire with an employer pension, and some pension promises […]

Pension Time Bombs

Detroit’s bankruptcy is an implosion of overpromises, underfunding, national recession and local depression.  Detroit’s residents and creditors are feeling real pain from their bankruptcy.  It’s an unusual case because pension obligations are being forcibly reduced, sending waves of alarm to unionized workers across the US. For decades, local politicians agreed to wage and benefit deals […]

Your Wallet and Private/Public Sector Pension Underfunding

American workers expect to work longer than they used to — 27% say they’ll retire at age 70 or higher and 7% say they’ll never retire.    They also voice jitters over retirement income and expect to rely on several sources during retirement:  56% expect to have a traditional (defined benefit) pension; 72% expect to use […]