Source: Dan Froomkin / The Huffington Post
State governments have already been slammed by the recession, but there’s an even more massive financial threat looming in the form of immense projected shortfalls in public-employee pension funds — in some cases so big there is literally no way the states can make them up anytime soon, even if they tried.
Chronic underinvestment (particularly in the bubble years), poor management of assets before and during the financial crisis, and, in some cases, unfunded benefit increases have put many pension funds wildly out of balance.
But state taxpayers are contractually obligated to make good on the retiree benefits — even as those promises threaten to crash headfirst into obligations to pay for schools, public safety, health care and the like.
“Something has got to give,” says Joe Nation, the director of a Stanford University graduate program that is reporting today that the cumulative shortfall from California’s three giant pension funds alone is somewhere around $500 billion.
To read this article in its entirety visit The Huffington Post.
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