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Off by Trillions: The Reality of our Pension Problem

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Pension funds are using overly optimistic assumptions about investment returns and should treat pension promises as guarantees that need to be backed up by risk-free investments. As a result, actual liabilities are three times higher than what is being reported by state and local pension funds. State and local governments need to change how they plan for future pension costs and set aside more money in order to prevent higher taxes or cuts to services taxpayers enjoy.

Be sure to read “Hidden Debt, Hidden Deficits: 2017 Edition,”  in which Joshua D. Rauh details the issues surrounding the pension system and the role of governments in increasing liabilities and deficits by means of their pension system. 

Discussion Questions

  1. What can you do to ensure state politicians use tax revenue appropriately to fund their pension systems?
  2. What are the specific problems the pension system is facing in your state?
  3. How can you lower the unfunded liabilities in the pension systems in your state?