Pension Funding Scare Won’t Frighten All States
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Oct. 24 (Bloomberg) -- State and local governments,struggling to emerge from the aftermath of the financial crisis,face another looming funding gap: in their public pensions.These plans hold almost $3 trillion in assets and cover morethan 10 percent of U.S. workers, so they’re an important forcein the economy.
Even under existing accounting rules, which make thepension math look good by allowing states to apply anartificially high discount rate to future liabilities, theaverage state pension plan holds assets equal to only aboutthree-quarters of projected liabilities. The difference amountsto about a half-trillion dollars.