The New York Times reports today on what happened after Prichard, Alabama did something many refuse to believe is possible: when the city's pension fund ran out of money, it simply stopped sending checks to 150 or so retired workers. The story mentions Philadelphia and Illinois among the places whose pensions are also under great strain. New Jersey is also high on the list, with a unfunded liability of $45.8 billion as of June 30, 2009, more, per capita, than any other state in the nation. One national pension expert estimates that with an eight percent return on investments, the state's public employee pension funds will run dry in 2019. Christie argues the pension fund is in trouble because benefits are too rich, but another key reason is that politicians of both parties have habitually declined to pay into the pension fund over the years. This year, Christie skipped $3 billion payment into the pension fund. The governor is calling for major reforms of the pension system, but under current law, the state would only be required to pay 1/7 of its "required" contribution in the next fiscal year. Click here for Philly.com's politics page.
For previous coverage of New Jersey’s pension problem, go to:
To read about how New Jersey’s pension funds came to be so underfunded, go to:
And, for the NYT story on the Prichard's problem, go to: