One of the main reasons California in all its anti-Trump rage isn’t going anywhere anytime soon is because the state knows that it has a massive government employee pension problem and that it will one day have to call on the rest of the United States to “solve” (bailout) this problem for them. Watch.
But the rest of the country isn’t in great shape either.
This is one of those things that few will pay attention to until it’s a 5 alarm fire. Then the policymakers will run around with their hands in the air saying they didn’t see it coming.
Of course they did. But addressing the problem is hard and will make people unhappy in the short term.
(From Market Watch)
But take a look South Carolina’s government pension plan, which covers roughly 550,000 people — one out of nine state residents — but is a staggering $24.1 billion in the red.
This is not a distant concern, but a system already in crisis.
Younger workers are being asked to do much more to support the pensions of retirees. An analysis by the The Post and Courier of Charleston noted recently that “Government workers and their employers have seen five hikes in their pension plan contributions since 2012, and there’s no end in sight.” (Most now contribute 8.66% of their pay, vs. 6.5% before the changes.) At the same time, the pension fund has been chasing more stocks and alternative investments instead of relying on stable investments like bonds that may be much less volatile but generate only meager returns.
And if that’s not troubling enough, South Carolina’s pension fund is far from alone.
Of course many of us are asking, “Pensions? What’s a pension?”