There seem to be no popular options that will fix the growing problem.
The problem of under-funded public pensions is severe and not isolated to just a few public programs, according to the Economist in “American public pensions suffer from a gaping hole.”
While most private companies have moved to 401ks, public employees still have the old pension system.
Because of these pensions, they are often not eligible for Social Security.
The biggest source of the problem appears to be that administrators have preferred to use projection methods that are unrealistic. More realistic projections would require governments to make greater contributions.
There are no popular options to fix this problem.
Taxpayers do not want to pay more so governments can meet their pension obligations.
Public employees do not want to contribute more of their paychecks to the pensions. Current and future pension beneficiaries do not want to see their benefits cut.
Something will have to give to address the public pension problem adequately.
If employees cannot rely on their pensions, then they might not be able to retire as planned, unless the federal government intervenes and covers the pension shortfalls.
Reference: Economist (Oct. 5, 2017) “American public pensions suffer from a gaping hole.”
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