First, U.S. public pension plans face unfunded liabilities of over $2 trillion, says Orin Kramer, chairman of New Jersey’s pension fund. Kramer is stealing the show in this morning’s FT with a new take on an old story. Sneaky accounting and laughably unrealistic expectations of future returns have led many econ-nerds, your editors included, to suggest pension funds are in a deep, dark hole… maybe as bad as a trillion bucks.
Well, Mr. Kramer, citing his own experience running Jersey’s fund, said today that it’s probably twice as bad. For every dollar the average public fund has promised, he says, it has only 60 cents on hand. In other words, 40% of people with public pensions technically have no money saved on their behalf.
We’ve rung this bell again and again , but hopefully, Mr. Kramer’s admission in this morning’s FT will elicit change — while there is still time. Of course, it probably won’t. Kramer is also a huge player for the Democratic Party. Thus, we suspect certain members of the Senate will reject any notion with his name at the top. Not to mention we’d love to see a campaign built around pension reform… in this land of ballot busting baby boomers, you’d get more votes on a Neo-Nazi ticket. (more)
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