Monday, March 16, 2009
State and local pension plans could be in serious trouble
State and local governments, and most of all school districts, face severe budget squeezes as they meet pension obligations with asset bases greatly reduced by the financial crisis. That is the story today from Michael Laris on the front page of The Washington Post, p A01, Monday March 16, 2009. The title is “Pension Check Guarantees Mean More Budget Woes” and the link is here. Pension plans for Maryland, Virginia, and the District of Columbia public and school employees (and teachers) have lost more than $28 billion since mid 2008.
The other complicating problem is rapidly rising retiree medical expenses.
It’s not clear how pensions are guaranteed if a state or lower government defaults or goes into bankruptcy, or how retiree rights compare to ERISA in the private sector.
There is a blog, called Pension Watch or “Pension Tsunami”, run by Jack Dean, that tracks pension problems in local governments here.