Below is a discouraging chart, ranking the states’ projected public employee pension debt (shortfall) per household. California is in 3rd place, but essentially is in a tie for 2nd worst with basket case Illinois. The worst state by far is Alaska, a state that bet the farm on endless oil company tax revenues so they didn’t fund their state employee pensions much at all.
One takeaway that isn’t discussed in the analysis but should be emphasized: EVERY state has an unfunded (taxpayer) liability for these guaranteed pensions. Every single one!
Clearly these “defined benefit” plans are universally abused by politicians — giving away lush underfunded benefits today that must be paid by others years down the road. The federal government should use the tax code to end the deductibility of guaranteed pension contributions — making such guaranteed pensions illegal for new employees, and frozen for existing employees, allowing no further participation. Replace these abusive pensions with non-guaranteed 401k-type retirement plans.
California’s per household pension obligation is over $77,700, edged out by the Illinois debt of $77,822 per household. The national average is $41,219 owed per household.
|Key Metrics for year 2014|
|Rank||State||Market Pension Debt/Household|
|51||District of Columbia||$10,822|
A more detailed but readable write-up of this debt problem can be found on this Stanford think tank’s website: http://us.pensiontracker.org/