Sunday, August 2, 2020

The Pension nightmare of U.S. States

Already the pension obligations of various states were nothing to brag about especially Illinois, New Jersey and New York, and now with this Pandemic, when the tax revenue shortfall is hampering the budgets of all states, these so called legacy obligations unfortunately enshrined in their state constitutions are no longer a priority and the shortfall is expanding exponentially with each passing month and year as the States fail to put whatever extra money they have into these Pension funds. Everybody who matters which means most of the state politicians have turned a blind eye to these obligations and just pushing this problem to the next legislative body that comes in. The scarier part is the more and more of the states’ budget is being consumed by these obligations which are becoming a rarity in the private sector. And the public sector employees who have a pension plan are under the illusion that all the promises they have been given regarding their pension plans will be fulfilled. How, nobody knows that and it seems nobody cares cause the future generation keeps on getting indebted with these obligations and the budget seems to getting bigger with tax increases the easiest way to pay for it.

And I have read how much pension some government employees are getting. I know that public sector employees’ salaries are less than private sector and they rely on these pension to bolster their salaries but not all private sector employees make a ton of money. If most of the private sector has done away with pensions and replaced it with other retirements plans, why can’t the government replace pensions with it too since it is useless to promise something which you don’t have like this promise of paying pensions when they don’t even put funds in these plans. It is time that government and public sector employees both contribute to their retirement plans and save the future tax payers a lot of grief and anguish and the states trouble to provide for present population instead of worrying about whether the past employees pension funds are fully funded. Get on with amending the state constitutions if you have too.

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