Pennsylvania’s two public pensions face a combined shortfall of $41 billion, and their costs will consume 62 percent of fiscal 2014 revenue growth, according to a report from the state budget office.
The State Employees’ Retirement System has 65 percent of assets needed to cover projected liabilities, and the Pennsylvania Public School Employees’ Retirement System is 69 percent funded, the report said. The plans cover 817,000 people.
In July, Moody’s Investors Service cut the state’s general- obligation debt rating to Aa2, its third-highest, citing rising pension obligations that will weigh on its economic recovery. Funding for state retirement plans across the U.S. fell in fiscal 2011 for a fourth straight year, to a median coverage ratio of about 72 percent, data compiled by Bloomberg show.
“Absent meaningful structural pension reform, the state’s general-fund budget is on a very predictable path that will force a choice between either fully funding pension obligations or making cuts to the core functions of government,” Charles Zogby, Pennsylvania’s budget secretary, said in a statement.
2 comments:
Maryland is in the same boat. The last time I checked - just a few months ago - Moody's, S&P also warned Maryland about the unfunded OPEB liability. The fell dangerously low - at one point falling below the 60% threshold.
I have seen figures for the unfunded liability anywhere from 18 - 24 billion dollars - http://thedailyrecord.com/2010/10/07/maryland-begins-potentially-painful-pension-process/
In fact, they even robbed 240 million of the ARRA stimulus to fund the school teachers pension.
These pension funds are nothing but a ponzi scheme. You can only go for so long paying more retirees than actual employees. I can't say I will feel sorry for the current govt employees who will find the funds completely gone. If they didn't have the foresight to see this current system will not work for long then that's their problem. You never ever trust anyone else with your money.
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