Senator Walters: States’ & Local Pension Funds Play Down Unfunded Liabilities by at least $1.5 Trillion

Economists Agree: States’ & Local Pension Funds Play Down Unfunded Liabilities by at least $1.5 Trillion

 Last week, the Washington Post reported that at least 40 states and countless cities are projected to have at least $1.5 trillion in unfunded liabilities. In 2008, Warren Buffett predicted that taxpayers would pay the price when pension plans’ forecasts prove to be inaccurate.

 “Public pension promises are huge and, in many cases, funding is woefully inadequate,” he wrote. “In a world where people are living longer and inflation is certain, those promises will be anything but easy to keep.”

The article accurately points out, “If the pension obligations are as enormous as critics say, virtually every state and local government running a pension will have to invest more in its pension plan – either by cutting services or raising taxes – or gamble that it will achieve a high rate of return on its investments.” California’s economy and the taxpayers cannot afford either action, which is why the Governor and Legislature must act now to reform our pension system.

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