George F. Will has published an article in the National Review where he discusses “…the tsunami of pension problems that will wash over many cities and states.”
Mr. Will cites Dallas and the state of Illinois as examples of very large and expanding pension liabilities. Mr. Will goes on to opine, “Nowadays, America’s most persistent public dishonesties are the wildly optimistic, but politically convenient, expectations for returns on pension fund investments.” In the seventh year of a recovery and with surging markets, pension funds continue to fall short of the expected returns on their assets. Combine that with states not funding pensions at the required amount each year and pensioners living longer, results in this pending crisis.
I like to say, “It’s not magic, its just math.” Mr. Will says, “Demography, however, is destiny for entitlements, so arithmetic will do the meddling.”
