As I wrote in Wealth Daily yesterday, the pension crisis has begun to gather some serious steam.
In fact, according to a new report released by the PEW Center there is a now $1 trillion dollar gap between what states have promised their workers and what they’ve actually set aside to pay those bills.
Behind the spin, States have set aside only $2.35 trillion of the $3.35 trillion they’ve promised their current and retired workers in pension, health care, and other retirement benefits.
And while the economic crisis and the drop in investments has helped to create this problem, the massive gap is primarily the result of states’ inability to save for the future and manage the costs of their public sector retirement benefits, according to Susan Urahn, managing director for Pew Center.
What more, she added, “The growing bill coming due to states could have significant consequences for taxpayers-higher taxes, less money for public services and lower state bond ratings.”
Needless to say, that is something of brutal mix.
In the meantime, here is more on this thorny issue from Susan Urahn. She appeared yesterday on Bloomberg.
Want to know how your state stacks up?… You can read the full PEW Report click here.
To learn more about Wealth Daily click here.