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NJ unfunded liabilities hit $83 billion

December 4, 2008

‘New Jersey’s pension fund faces a $25 billion deficit, with the state also obligated for $58 billion in medical benefits for retired government workers.’
http://www.forbes.com/feeds/ap/2008/06/05/ap5087249.html

Written by Bear · Filed Under Public Pensions 

Cities and states to ‘come clean’ on pensions

December 4, 2008

In a New York Times article, entitled `Government Rule Makers Looking at Pensions‘, we learn that the plight of public pensions will soon be brought to light. At risk to the cities and states are their bond ratings, and potential for ‘pension misconduct’.

NORWALK, Conn. — As cities and states struggle with ballooning retirement costs, accounting rule makers started an ambitious project Thursday to force state and local overnments to issue better numbers and reveal the true cost of their pension promises.

Written by Bear · Filed Under Public Pensions 

Canadian pensions take worst hit in 10 years

December 4, 2008

No surprise here. Both defined contribution and defined benefit plans in Canada are taking it on the chin. A release by Canwest News Service outlines the carnage suffered by Canadian pension funds in 3Q2008. The article, entitled ‘Canadian pensions take worst hit in 10 years‘ sites a 6% drop in the Mercer index, which shows the ratio of assets to liabilities in a model pension plan.

“The financial health of Canadian pension plans was markedly worse as the market tumbled through the end of September,” consulting firm Mercer said, noting that its pension health index was down six per cent at the end of September from the end of the second quarter, and about 10 per cent for the year.”

It is projected to have fallen to 70% by 9 October. The article goes on the say that,

“According to one estimate, company pension funds have lost about $50 billion over the past six months in the stock market, while individuals have lost an estimated $30 billion.”

Underfunded defined benefit plans could pay pensioners according to the level of funding, which would have current retirees walking away with a pension valued at 70% of the promised value.

Defined contribution plans are typically following the markets, which would put many retirees’ portfolios  40% short in Mid October.

Written by Bear · Filed Under Public Pensions