It is the 19th of September 2019

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Forget The Phony Pension Accounting, Here's How Much Your State Pension Is Really Underfunded

The phony assumptions that go into calculating public pension underfundings in the United States are a frequent topic for us.  As our readers are aware, state pension administrators are given fairly wide leeway to simply pick a discount rate out of thin air.  Of course, since pensions are nothing but a massive stream of future liabilities that stretch out into perpetuity, every 100 bps increase can substantially, and artificially, lower the fund's reported underfunded level. 

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A Few Simple Charts Spell Disaster For Public Pension Ponzi Schemes

Earlier today, Milliman released their 2017 Public Pension Funding Study which explores the funded status of the 100 largest U.S. public pension plans.  Not surprisingly, this study only served to confirm many of the rather alarming trends surrounding public pension ponzi's that we discuss on a regular basis.

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"It's Not Sustainable" - Sacramento Lashes Out At Calpers After Raising Pension Payments

In the latest sign that America’s looming pension crisis is inching closer to an all-our collapse that will inevitably end in a series of bailouts – or worse, the failure to pay out retiree’s coveted benefits - a handful of California cities are lashing out at CALPers after being forced to hike pension contributions to offset expectations for long-term returns that have been revised lower by the state pension system.

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Which American Cities Will File Bankruptcy Next?

We harp on the massive, unsustainable, yet largely unnoticed, debt burdens of American cities, counties and states fairly regularly because, well, it's a frightening issue if you spend just a little time to understand the math and ultimate consequences.  Here is some of our recent posts on the topic:

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CalPERS Slashes Pension Payments To Retirees In Two More California Towns By Up To 90%

While we've yet to experience any large municipal pension failures, which is just a matter of 'when' rather than 'if', the small pension failures sprinkled across the state of California are starting to pile up.  As The Sacremento Bee points out today, public workers in Trinity and Imperial counties are just the latest to have their pensions slashed by up to 90% as their cities admit what most of us have known for some time, namely that they're running ponzi schemes which simply don't have the funding required to payout the benefits they've promised. 

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What Fiduciary Duty? San Fran Politicians Try To Force Pension To Dump $470MM Of "Fossil Fuel" Stocks

We've frequently argued that public pension underfundings are perhaps the greatest threat to the long-term economic outlook of the United States, if not the globe.  With aggregate underfunding levels of $5-$8 trillion, depending on what discount rate your local politicians decide to pull out of thin air, the forthcoming pension crisis will be too large for even the very generous American taxpayer to cover.

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