Posts Tagged ‘Public Pensions’

Unfunded Pension Liabilities Reach $7 Trillion

Monday, July 10th, 2017

The mean average amount saved for retirement by all working-age families in the U.S. is just $95,776, according to a new report from the Economic Policy Institute. The median average – that is, the average for those in the 50th percentile – is just $5,000.

That’s tragic, as it means that many Americans will be unable to afford to retire. At the same time, they are on the hook to pay unfunded liabilities for government employees as they retire.

Most private-sector employees have “defined contribution” plans, such as 401(k) plans, which are self-directed. Employers typically provide matching funds, but if you don’t contribute, you get nothing. Which is why many have saved little or nothing.

In contrast, employees in the public sector often have “defined benefit” plans, which are traditional pension plans. Defined benefit plans, as the name implies, guarantee a set amount throughout a person’s retirement years. (more…)