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| Economy |
| States short $1 trillion to fund retiree benefits |
| 2010-02-20 |
| (CNNMoney.com) -- Just as they are contending with massive gaps in their operating budgets, states and localities must also deal with a $1 trillion deficit in public employees' retirement benefits' funds, a new report found. The shortfall amounts to more than $8,800 for every household in the nation, according to the Pew Center on the States, which published its findings Thursday. States largely got themselves into this mess by failing to make annual contributions while also enhancing benefits, the study found. Now, they are behind by a total $452 billion in their pension accounts and $555 billion in their retiree health funds, as of the end of fiscal 2008, which ended June 30 for most states. The deficit is likely even more severe because the report did not take into account the crumbling of the stock market in the latter half of 2008. The typical pension plan lost 25% of its value in 2008. |
| Posted by:Fred |
| #1 This was hidden further down: Retiree health care and other non-pension benefit accounts are in even worse condition. Only about 5% of their total liabilities are funded. States generally paying these bills as they come due, rather than setting aside money in advance. |
| Posted by: Anguper Hupomosing9418 2010-02-20 00:36 |