US Teachers State Pensions Near $500 Billion in Unfunded Liabilities

[Chef Ramsay]

If you think you have retirement worries, even teachers who are on a state-run pension may be in the same boat, or even worse down the road. A new report card prepared by the National Council on Teacher Quality shows that state teacher pension systems had a total of $499 billion in unfunded liabilities in 2014. Yes, that is just one interest payment short of hitting a half-trillion dollars.

Another concern is that this debt load has risen by $100 billion since the same report card was prepared for 2012. States earned an average overall grade of C− for their teacher pension policies. That doesn’t sound very good.

The 2014 report card showed that roughly 70 cents on every dollar contributed to state teacher pension systems is now paying for debt rather than paying for retirement benefits. If that much funding is just supporting debt, what happens if the investment returns take a hit? And what happens if interest rates paid to support that debt start to rise?

More...http://247wallst.com/economy/2015/01/27/us-teachers-state-pensions-near-500-billion-in-unfunded-liabilities/#ixzz3Q76LOJQc

[1714899910]

1714899910

[1714899910]

1714899910

[1714899910]

1714899910

[pattu1]

Unfunded liabilities... This is bad.

The only way out is to convert these pension plans to defined contribution plans. Make sure that states are forced to pay out contributions regularly and not depend on future generations to foot the bill.
Otherwise, you will have crises like this cropping up.

[Lethn]

Considering these teachers are partially responsible for the state the economy is in because they won't have properly prepared the majority of their students for the real world I have very little sympathy, much like when I see teachers in my country going on strike over pensions.