The Global Demise of Pension Plans
by Raul Illargi Meijer
27 August, 2012
We have been saying for a long time that anyone in the western world who's 10-15 years away from collecting their first pension payments, shouldn't expect to get much, if anything, when the time comes. This is because, obviously, the economy has deteriorated as much as it has. It's also because, in essence, pensions plans are the ultimate Ponzi schemes.
Meanwhile in the public sector, a separate pension-related report by the national State Budget Crisis Task Force warned that public pension funds in the U.S. are underfunded by $1 trillion to $3 trillion, depending on who's making the estimate.
Low returns will further aggravate funding shortfalls for hundreds of pension plans, adding to pressure on cities, counties and states that are already facing lower tax revenue and rising costs.
Other estimates put the shortfall even higher. State Budget Solutions estimated it in a recent study at $4.6 trillion as of 2011.