Notice: Undefined index: HTTP_ACCEPT in /mnt/stor3-wc2-dfw1/509309/www.mygovcost.org/web/content/wp-content/themes/mgc/header.php on line 13
Read More »"/> Read More »"/> Veronique de Rugy on the State Pension Time Bomb | MyGovCost | Government Cost Calculator

Veronique de Rugy on the State Pension Time Bomb


Tuesday March 8th, 2011   •   Posted by Emily Skarbek at 10:29am PST   •  

Over at Reason Magazine, Veronique de Rugy illuminates the State Pension problem by drawing attention to the differences in accounting rules applied by the market and the government.

As de Rugy notes, states are not required to pony up regular contributions to pension systems and they systematically underestimate the liabilities in pension funds.

State officials not only failed to set aside sufficient money to fund future benefits, but they also illogically assumed that the riskier the investment, the better funded the plan would be.

One of the most important aspects De Rugy raises is that much of these unfunded liabilities exist off the books as a result of these poor accounted practices. This means that the debt crises in many states are dramatically underestimated. For example:

[Connecticut’s] reported debt is roughly $23 billion. The estimated value of its unfunded pension liabilities is $48.4 billion. To that amount we should add another $28.2 billion in underestimated liabilities due to poor accounting standards.

For a related study from Eileen Norcross, see here.


Notice: Undefined variable: thumb_url_relative_nonums_or_x in /mnt/stor3-wc2-dfw1/509309/www.mygovcost.org/web/content/wp-content/themes/mgc/single.php on line 139

Deprecated: strpos(): Non-string needles will be interpreted as strings in the future. Use an explicit chr() call to preserve the current behavior in /mnt/stor3-wc2-dfw1/509309/www.mygovcost.org/web/content/wp-content/themes/mgc/single.php on line 139



Facebook Twitter Youtube

Search


By linking to Amazon.com from this page, Independent Institute earns referral fees of 4% to 15% from whatever you buy. Bookmark the above link and you can support the Institute when you do your normal shopping!

TIR

RSS Recent Posts on The Independent Institute’s Other Blog, The Beacon

March 2011
S M T W T F S
 12345
6789101112
13141516171819
20212223242526
2728293031