“The public pension system lost $1 trillion, a 21 percent loss for the fiscal year, following the COVID-19 lockdowns in March. In turn, these losses have added–an overwhelming amount of stress on our public pension systems, as state and local pensions were already facing a $4.1 trillion shortfall. Public pension liabilities are on track to increase to $1.62 trillion this year, up from $1.35 trillion in 2019. These numbers are alarming as many governments now have less capacity to defer cost hikes or take mitigating actions because their non-asset cash flow has greatly declined.” America’s Public Pension System Remains Mired in Crisis – Kevin O’Conner https://morningconsult.com/opinions/americas-public-pension-system-remains-mired-in-crisis/Â
Even before the COVID lockdowns that prompted a wide-scale economic slowdown, the public pension funds in the US were facing serious shortfalls and potential crises. The boneheaded response to COVID by the various governments has exacerbated the situation. If you are a pensioner who received money from a federal, state, county, or municipal pension fund, you might want to look into the status of your pension fund.
It is an open secret that pension funds, especially the public pension defined benefit type, are facing major shortfalls in funding and return on their investments. What do I mean by underfunded plans? Here is a simple explanation. “An underfunded pension plan is an employee benefit plan for retirement income that has fewer assets than liabilities, or what it owes in benefits. If a pension plan is underfunded, it is not on track to have enough money to pay out all of its promised benefits and other expenses. An underfunded pension plan usually refers to a defined benefit plan, such as a pension for state employees or a multiemployer pension plan, rather than a defined contribution plan like a 401(k).” What is an underfunded pension plan? Jake Safane
https://www.thebalancemoney.com/what-is-an-underfunded-pension-plan-5
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