At the Huffington Post, Kil Huh, Director of Research at the Pew Center on the States, feeds Via Meadia with more ammunition in our ongoing struggle to publicize the coming pension disaster. Huh warns that 34 state pensions are less than 80 percent funded and falling, and underfunding of these pensions is just as much of a long-term problem as is overestimating their probable investment returns.
Huh fingers the right culprit for this mess:
It is easy to blame unions or Wall Street for states’ pension problems. But policy makers are the ones who made promises they couldn’t afford, didn’t pay for, and now can’t keep. Recent investment losses have hurt pension plans, but the decline in pension funding started before then—largely because some policy makers shortchanged their retirement systems for years and relied heavily on investment gains that never materialized. Now, these same states can’t count on investing their way out of this funding crisis.
Of course, knowing who’s to blame isn’t the same as fixing the problem, but on that score, some recent voting patterns have been encouraging. Let’s keep spreading the dismal news.
And as for current pension holders, our usual advice applies: Save aggressively. Invest prudently. If your current pension seems too good to be true, it probably is. Your politicians and union leaders can and will lie to you about the solvency of your retirement, and there won’t be all that much you can do about it—except maybe to vote the bums out.