Most of the the nation's state pensions
are underfunded, dangerously so. Most issued bonds over the years to
finance pension contributions -borrowing money that eventually must be repaid,
California, Illinois and New York are prime examples of governments whose politicians were and still are willing to let political ambition rule their planning; to let future state administrations take on the ultimate burden of eventual bankruptcy, simply because they will not face up to unsustainable policies. A pending disaster brought on by past concessions to government union demands for pensions that are not economically feasible.
A way out is to raise the retirement age to 67 and later, from much lower levels, made to sweeten deals with influential unions. And to cap pension cost-of- living payments in salary as well as pensions. Further, government workers will have to contribute more than they do to pension and health plans.
Moreover, the states have to be more realistic when planning for future pension earnings. They are not going to get 8% or so on investments, a figure that’s usually the minimum they count on in their planning. (See the Earl J. Weinreb NewsHole® comments.)
California, Illinois and New York are prime examples of governments whose politicians were and still are willing to let political ambition rule their planning; to let future state administrations take on the ultimate burden of eventual bankruptcy, simply because they will not face up to unsustainable policies. A pending disaster brought on by past concessions to government union demands for pensions that are not economically feasible.
A way out is to raise the retirement age to 67 and later, from much lower levels, made to sweeten deals with influential unions. And to cap pension cost-of- living payments in salary as well as pensions. Further, government workers will have to contribute more than they do to pension and health plans.
Moreover, the states have to be more realistic when planning for future pension earnings. They are not going to get 8% or so on investments, a figure that’s usually the minimum they count on in their planning. (See the Earl J. Weinreb NewsHole® comments.)
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