Since I’ve said “I told you so” a few times of late, this time I’ll just do this…..
Unfunded pension liabilities are approximately $2.5
trillion, compared to the reported amount of $493 billion.
Unfunded liabilities for health and other benefits are
$558 billion, compared to the reported $537 billion.
Thus, total unfunded liabilities for all benefit plans are an
estimated $3.1 trillion — nearly three times higher than
the plans report.
If you need this translated, it’s very simple:
You’re not going to get the money you think you were promised.
If you’re a government employee and are counting on some sort of pension plan, get over it.
The money does not exist.
It cannot be acquired.
If you scream about “But the state constitution says we’re protected!” I will simply remind you that it is easier to change a State Constitution than it is make money that doesn’t exist magically appear.
To put this into context, the shortfall is double the annual Federal Budget deficit – at today’s bloated amounts. It is five times the average federal budget deficit during Bush’s administration.
Again: You’re not going to get the money, and most of it isn’t, as is commonly believed, in the form of medical benefits – it’s in direct cash pension compensation.
You were lied to by the plan administrators.
They (intentionally) used ridiculously-rosy projections of “gains” in their portfolios.
Their “projections” are outrageously unsound, as is their accounting.
Your public-sector unions lied to you too. They led you to believe that you could have the equivalent of a free lunch and that these plans could be funded and would pay. You can’t and they can’t.
Now you can get angry at “the people” all you want. The fact of the matter is that the people who BS’d you aren’t the public – they’re your so-called “union representatives” and the so-called “pension managers”, all of whom you hired and who report to you, not to the taxpayer.
More than two years ago I wrote a couple of Tickers on this subject and warned you that you were going to get hosed – severely. That the funds you think are there are not and would not be.
If you are a state or local government employee and thought I was some sort of nut a couple of years ago when I was warning you that you had better start both raising hell and socking back your own funds, you better read this report – and then get VERY angry, as you’ve now lost two more years of time with which you could have been trying to do something about securing your own retirement.
The programs you believed would protect it will not be there when you expect them to be.