By Harris Sherline
State by state county by county city by city we hear and read about the problems of underfunding of the nations pension plans. But we dont hear much about the potential threat that pension liabilities pose to the entire economic structure of the nation. When the dam finally breaks every city county and state will be flooded with a rush of liabilities that could easily suck the entire U.S. financial structure out to sea.
A brief survey of newspaper articles from around the country frames the scope of the problem. Spending a little time on the Pension Tsunami website will give you a sense of the scale of the nations unfunded and underfunded pension obligations. Following are just two examples:
The Motley Fool (April 27 2009) State Pension Problems observed that an obscure newspaper Central Pennsylvanias
Centre Daily Times noted: The figure is a moving target. But in a March presentation to a state House panel the states two large public-sector pension plans estimated that the $821 million a year they currently get in employer contributions - the vast majority of it from taxpayers - will need to grow to $5.7 billion a year by 2012...Even more frightening is that those numbers involve assumptions that could be overly optimistic.
The Star-Ledger (April 26 2009) Scary Numbers on the NJ Pension Plan by John Bury noted: ...There is about $58 billion left in the plan per the investment people. As of July 1 2008 there were 243877 retirees getting benefits of $6.22 billion. A year earlier there were 235346 retirees getting benefits of $5.78 billion...Assuming the same percentage increase over the next five years there will be $43 billion paid out in benefits.
According to the National Debt Clock (
www.brillig.com/debt_clock) as of May 12 2009 the outstanding public debt was over $11 trillion. The estimated population of the United States is 306169145 so each citizens share of this debt is $36821. The National Debt has continued to increase an average of $3.83 billion per day since September 28 2007!
As bad as that may be it does not include the underfunded pension liabilities of the 50 states over 3000 counties and thousands of municipal governments around the country. In addition there are unknown billions of dollars of unfunded or underfunded pension obligations lurking behind the balance sheets of the nations industrial giants. Think about the pension liabilities in just the airline and automobile manufacturing industries.
The Wall Street Journal reported in April 2005: The Pension Benefit Guaranty Corp. was created by Congress in 1974 to insure defined-benefit pension plans -- those that provide workers with a monthly check based on wages and years on the job -- after a campaign that began when 4000 Studebaker-Packard Corp. workers were left without pensions when the auto maker shut in 1963...Last year the agency said it had $62.3 billion in long-term obligations to pay workers but only $39 billion in assets a gap of $23.3 billion.
So far the agency has taken over the pension plans of 141 steel companies which were underfunded by $10.2 billion and 12 airlines which were underfunded by $5.2 billion. The agency said it expects to assume a further $6.4 billion from UAL Corp.s United Airlines.
Read more HERE
*This story is from www.GOPUSA.com
By Harris Sherline
State by state county by county city by city we hear and read about the problems of underfunding of the nations pension plans. But we dont hear much about the potential threat that pension liabilities pose to the entire economic structure of the nation. When the dam finally breaks every city county and state will be flooded with a rush of liabilities that could easily suck the entire U.S. financial structure out to sea.
A brief survey of newspaper articles from around the country frames the scope of the problem. Spending a little time on the Pension Tsunami website will give you a sense of the scale of the nations unfunded and underfunded pension obligations. Following are just two examples:
The Motley Fool (April 27 2009) State Pension Problems observed that an obscure newspaper Central Pennsylvanias Centre Daily Times noted: The figure is a moving target. But in a March presentation to a state House panel the states two large public-sector pension plans estimated that the $821 million a year they currently get in employer contributions - the vast majority of it from taxpayers - will need to grow to $5.7 billion a year by 2012...Even more frightening is that those numbers involve assumptions that could be overly optimistic.
