“After years of not setting aside enough money, state pension funds are looking at a $1 trillion shortfall in what they owe workers in benefits, according to a new analysis from The Pew Charitable Trusts,” as CNBC is reporting this morning.
“State retirement systems caught a break with strong investment returns in fiscal 2014, but the gap is expected to top $1 trillion in fiscal 2015, the last fiscal year with full results.
“”The lesson here is that state and local policymakers cannot count solely on investment returns to close the pension funding gap over the long term,’ the report said.
“While many states have cut benefits for new workers and frozen plans for current staff, they cannot cut benefits that have already been earned by public employees. That means they have to find money to make up the shortfall by cutting other programs, raising taxes or both.
“The report is based on the most recent data from all 50 states, which are typically reported as much as a year after each fiscal year ends.”
The rest of the article is here.