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Pensions, Medicaid, and State Budgets: Any Solution In Sight?

"The growing costs of Medicaid ... seem 'almost inexorable.' The growing cost of pensions have the potential for 'dramatically negative' effects.... It's a challenging time, and it will require states to reexamine their entire approach to government[.]"

Promises Made, Promises Broken: State Pension Underfunding Totals $4.1 Trillion

"Comprehensive research into the funded status of state level defined benefit public pension plans reveals that public employee retirement promises are underfunded by $4.1 trillion. Combined, state public pension plans are just 39 percent funded.... With their rejection of an unsatisfactory approach to calculating public pension liabilities, GASB and Moody's have joined a chorus of financial economists and other observers warning that pension funding practices are dangerous for both taxpayers and public employees alike."

Municipal and State Pension Hemorrhage Accelerating

"According to the ... U.S. Census Bureau ... more than $1.22 trillion came in to the pension plans and more than $1.29 trillion went out instead of growing to pay guaranteed future benefits. Those promised benefits grew by about $1 trillion over the same period. Worst of all, since Census collected those data pension investments have dropped as the obligations continue to grow, according to quarterly data through June 30. That puts municipal and state governments on a collision course with hidden pension debt ... at more than $5 trillion over the next 30 years."

Unfunded Public Pension Liabilities Account for Half of Total State Debt

"Market-valued unfunded public pension liabilities make up more than half of all state debt, accounting for $2.8 trillion of the total. These market-valued pension liabilities provide a realistic view of the money owed to public pension systems as a result of years of skipped payments, borrowed funds, and inaccurate discount rate assumptions."

The People Shouldn't Get to Vote on Public Pensions?

"Keith Brainard, research director of the National Association of State Retirement Administrators, acknowledged Thursday in response to a question about recent California city voters cutting future benefits that 'they have that right, but it's far better for compensation to be determined by a smaller group ... instead of the passions of the popular vote.' His response came during a Web presentation Thursday by NASRA and the Center for State and Local Government Excellence ... [P]anelists ignored the question of who is going to make up more than $4 trillion -- and growing fast -- in pension shortages to focus on recent reforms that might, if markets never decline again, take pressure off taxpayers 30 years from now."

Study Calls for 'Drastic Reform' of Public Pension Regulation

"Recent studies by the Harvard Kennedy School Mossavar-Rahmani Center and the Federal Reserve Bank of Cleveland prove all municipal and state pension funds eventually will run out of money without immediate radical reforms and 'huge' future tax increases.... What we end up with is public policy that hides trillions of dollars in debt, puts 27 million public workers and retirees at risk of poverty and actually encourages the risky, reckless behavior that caused this municipal and state pension crisis in the first place."

Two Federal Reserve Bank Reports Scream Softly in Warning about Public Pension Crisis

"One reality the Fed delicately tiptoes around is that public-employee union voter drives and campaign contributions coupled with general voter ignorance, apathy and low turnout can be impenetrable barriers to reform until it is too late.... Bottom line: Rotten state and municipal finances hit by pensions 'whose troubles with chronic underfunding predate the financial crisis' could threaten the economic recovery necessary to save states and municipalities from their rotten finances."

Milliman Report Exposes Magnitude of Governmental Pension Plans Catastrophe

"When a 'premier global consulting and actuarial' firm proves in its first Public Pension Funding study that those government pensions are doomed, it is past time for action. Milliman's study showing a 33 percent increase in pension debt over official numbers from a minute change in accounting should be enough to spur reform. However, this hidden fiscal cancer threatening to consume the American economy and sabotage essential state and local government services gets even worse when you look at pension performance since the Jan. 1, 2012 cutoff date for the Milliman data. Those latest numbers show a system collapsing faster than the experts can calculate."

Taxpayers, Employees Can Probe Financial Health of Public Pensions

"Most public workers covered by defined benefit pension plans -- and taxpayers stuck with the tab -- don't have to wait years to find out what's happening to their money. They can get quarterly reports from the Top 100 funds representing 89.4 percent of 'financial activity.' Those funds ... send quarterly reports to Census to compile '...national summary data on the revenues, expenditures, and composition of assets of the largest defined benefit public employee retirement systems for state and local governments.'"

Fix for Government Pension Plans May Take Time, But Time Has Run Out

"One huge problem is the change only fixes future costs while leaving taxpayers on the hook for pension debt -- estimated at about $1 trillion three years ago to $5 trillion now ... When the 'contributions' governments force from workers and taxpayers cease, the existing debt just gets bigger because many pension funds imprudently use them to pay current benefits instead of investing to pay future benefits as universally required by annuity standards."