The dire financial condition of pension funds across the US has been a frequent topic here at The Sounding Line. At the core of the problem is a simple reality: pension funds have promised to pay out more in retirement benefits than they receive in funding. A new report from the Pew Charitable Trust shines light on the scope and causes of this underfunding problem.
Every year since at least 1999, US state and local pension funds have paid out more in benefits to retirees than they receive in contributions from current workers. The result has been increasingly negative cash flows.
The State Pension Funding Gap (2016).
Madison spent 25% of its budget on benefits in 2014-2015 “unsustainable”.