This morning my friend Sharon and I were talking and the subject of pensions came up. We both receive a pension from the Public Employees Retirement Account (PERA), a Colorado teacher’s retirement fund. I asked her if she knew if it was in good standing. She said she thought it had gotten better than in years past.
This evening while reading the Denver Post, I read an article by Terry Savage titled, “Pensions at risk, group finds.” After checking out the website mentioned, it appears the Colorado PERA account gets a grade of D. The School Division Trust Fund of PERA (Sharon’s and my pension fund) had unfunded benefits of -$15.30 billion in 2015! That’s a negative in front of the number!
Check out your city or state pension fund to see if you have an underfunded pension after you read this article:
Don’t Count on that Government Pension
by Terry Savage, The Savage Truth
April 23, 2017
“Millions of Americans are expecting to receive a pension from the city or state that employs them. Many will be in for a terrible surprise, according to the nonprofit organization Truth in Accounting.
It surveyed 237 municipal pension plans across the country, using newly required reporting data about pension underfunding. Although it has taken decades for many of these pension funds to get into such bad shape, only now are the details being revealed, says Sheila Weinberg, president of Truth in Accounting and a CPA who has dedicated her life to requiring full and useful disclosure of federal, state and local debt obligations. (I am a board member of Truth in Accounting.)
This newly collected data should be frightening to those counting on a state or municipal pension. The latest numbers are available at http://www.statedatalab.org/pension_database. There you can search by state to find both state and local pension statistics. The report for each city and state includes the amount of pension plan assets, the amount of plan promises, and the dollar amount and percentage of pension underfunding. Every plan also receives a letter grade, from A to F.
Of the 237 cities studied, 29 received an ‘F’ grade, reflecting a funding ratio of less than 35 percent. Those plans cover many thousands of workers who cannot possibly be paid their full promised pensions, absent a huge tax increase (which would also come out of their pockets as workers).”