02/18/2010 - Even before financial markets crashed in fall 2008, state governments nationwide had promised to deliver $1 trillion more in retirement benefits than they had in their pension investment funds, according to a comprehensive study made public Thursday.
The problem got worse as funds dwindled in value during the downturn, according to the report from the Pew Center on the States. Yet many states are still not setting aside enough money to cover the cost of the retirement promises they made to police officers, teachers and millions of other public employees as they struggle to balance budgets buffeted in the recession by falling tax revenues.
The shortfall is already consuming a growing share of government budgets at the cost of other services. Eventually, with the price of these benefits soaring as more baby boomers retire, states will have to choose between continuing to pay out and sink deeper into the red or significantly cut back the packages offered to retirees.
Read the full article State Retirement Benefit Promises Exceeded Pension Funds, Study Finds on The Washington Post's Web site.