FEBRUARY 20, 2013 Wednesday
Even Government Workers Will Eventually Lose Their Pensions
Corporations realized long ago that they couldn't afford defined-benefit plans, so today only 21% of U.S. private-sector workers can expect old-fashioned pensions. But 84% of government employees still have defined-benefit plans, leaving state and local governments with obligations they can no longer pay. In the coming years, governments will inevitably switch to defined-contribution plans, argue Howard Frank of Florida International University and two coauthors. One estimate puts state and city governments' unfunded pension liabilities at $3.23 trillion.
Source: Critical Questions for the Transition to Defined Contribution Pension Systems in the Public Sector
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