The Truth Behind the Public Pensions Funding Gap

[Donnachaidh]

http://www.commondreams.org/view/2011/03/24-5

State governors across the nation, led by newly elected right wing Republicans (with several Democratic governors in tow), are whipping up anti-union sentiment by declaring public workers and their unions are the cause of state budget deficits. They argue that various labor costs are driving up their deficits, but the lead cause of those labor costs is overly generous increases public employee pension benefits.

But increases in public employee pension benefits are not the cause of the States’ budget crises. There are, indeed, serious pension funding gaps in many states public pension plans. But a close investigation of these gaps shows clearly they do not exist because of states’ granting public employees exorbitant pension benefits.

The real reasons behind the pension funding gap are several.

:snip:

But there’s an even greater reason why pension funds have ended up short of income today. And that greater reason has been building for more than a decade. It’s what is called the practice of ‘contribution holidays’; that is, pension managers refusing to put the necessary contributions into the funds—a practice in the public sector that has been going on since the mid-1990s and even before that in the private sector.

MUCH more at the link --

[OHdem10]

1. Another point to consider. Pension Managers invest in the stock

market to bring additional growth to pension funds.
When we had the Stock Market crash at the beginning
of the Great Recession---Just how much money was lost
throgh Stock Market Investment?????