(Full disclosure: I served as Independent Counsel to Mr. Tobe in connection with his SEC whistleblower complaint.). | Joe Raedle/Getty Images. You shouldn’t be surprised seeing California take the top spot on our list, Like we said back on page 1, bigger states have more public employees and more pensions to fund. A few months ago, he joined a bipartisan group of senators in introducing a bill to secure the pensions for nearly 90,000 retired coal miners as a recent wave of coal company bankruptcies threatened the solvency of the federal pension fund. A staggering percentage (94%) of the state’s 114,000 retirees still reside in Kentucky and pump over $1.9 billion a year into all 120 counties. I am an active member of the Florida Bar. This is hardly the first time letting states file for bankruptcy to escape trillions of dollars in promised retirement benefits has been proposed. Thousands of private funds have been wound up. | 7Michael/Getty images. Minnesota is basically a carbon copy of Colorado, the state we just visited. Even millions of participants in the Dutch pension system—widely regarded as the “world’s best”—are facing benefit cuts and fearing there may be worse to come. Just take a look at 2016, when Texas paid $17.2 billion for pensions but collected just $11.3 billion. With 2.5 million pensions as of 2016 and 1.8 million working employees in plans, California is nearly $1 trillion behind when it comes to funding its pensions. Illinois’ financial problems are so bad that no amount of estate taxes or potential legal marijuana revenue will fix them. As of 2016, Ohio had $175.2 billion in cash and investments behind its pension plans. Chris Tobe, a former trustee of the Kentucky pension and SEC whistleblower, suspects when the pension reports fiscal-year-end performance July 1st, its funding level may fall into single-digits. States with larger populations have more public employees and more pensions to fund, but we’ll visit a small state with a big problem (page 4) and two medium-sized states with more than $350 billion in shortfalls (pages 12 and 13). Left unchecked, America's pension crisis will decimate the retirement future of millions, write John Boehner, former House speaker, and Joe Crowley, former US representative. A major pension crisis has made its way to Harvey, Illinois. Now, the whole State might suffer while you foot part of the bill… Peter Reagan, January 10, 2019 In a city with 20% unemployment, property taxes over 5%, and home values declining by 80% over the last … Colorado has one of the biggest pension shortfalls in the U.S. | cacaroot/iStock/Getty Images, There are fewer than 500,000 people taking pensions in Colorado, but the state has one of the biggest shortfalls in the United States. Now, the whole State might suffer while you foot part of the bill…. Ohio’s pension liabilities are more than double the cash and investments it has behind its plans. The wealth gap and ravenous mosquitoes are two reasons Florida is the most-hated state in America. When you do the math, payments are roughly 61% more than contributions, and unsustainable number making New York one of the states facing pension problems. For example, after Croatia’s parliament recently approved a government proposal to raise the retirement age from 65 to 67 and trim pensions for people who retire early, three top trade unions revolted and the government backed down—for now. Every state has pension shortfalls, but some are worse than others. | Seastock/Getty Images. It sounds like a lot until you consider its liabilities are more than twice that amount. No matter how you look at it, the Keystone State is one of the states making America’s pension crisis worse thanks to more than $223 billion in shortfalls. | Eduardo Munoz Alvarez/Getty Images. Massachusetts has close to 400,000 people taking pensions, and it’s nearly $135 billion short of what it needs to fund those pensions into the future. Since Illinois doesn’t allow cities to file bankruptcy on pension debt, each fund has to be “paid.” So Harvey has to cough up tax revenue to pay down its debt. Last Updated: February 17, 2020 12:48 pm. | Max Whittaker/Getty Images. Connecticut is a small state with more than 212 public pension plans. The pension funding gap is a problem for everyone. To get started, click here to get this free info kit on gold. Kentucky has over half a million (514,000) current and future pensioners who are unlikely to support his reelection. Evidently McConnell finds state workers less deserving than coal miners. | SeanPavonePhoto/iStock/Getty Images. Next: A ton of taxes can’t keep this state from showing up on our list. In 2011 former governor of Florida Jeb Bush and former House Speaker Newt Gingrich opined in the Los Angeles Times that federal bankruptcy law should be changed to allow states to “reorganize their finances.”, “If government employee union bosses know that they could have all their contracts annulled under federal bankruptcy law, either through a plan of reorganization voluntarily entered into by state leaders or by the voters through proposition, they may be far more accommodating with state governments to restructure government employee union workforces, pensions and work rules.”. Next: No. That’s a risk you can’t afford to take.”. underfunded public pensions is adopted, you can kiss your state pension goodbye. In October 2017 the UK Government implemented a mandatory automatic enrolment system … According to Ballotpedia, New York paid nearly $32 billion to pensioners in 2016. Georiga has more than $90 billion is cash behind its public pension plans, but that’s not enough. The state pension fund paid out twice the amount it received in 2016, and all told the Garden State is nearly $250 billion short of where it needs to be to keep pension payments going. Due to the low savings ratio, rapidly increasing longevity, new taxation of pension funds (for instance the removal of the right to reclaim withholding tax on equity dividends), and above all falling investment returns, many pension funds are in difficulties in the early 21st century. But the funds aren’t there, and robbing Peter to pay Paul can only last so long. These are the 15 states making America’s pension crisis worse. Cutting pension benefits will undoubtedly depress the local economy. It seems like a significant amount until you consider the state is billions short of what it needs to pay for the pensions. Research from the American Legislative Exchange Council shows just how bad the situation is for public pension plans around the country. It paid $7.1 billion to pensions in 2016, but only $3.8 billion went into the coffers. Doing nothing—sitting back, confident your pension check is “in the mail” is not an option. In a city with 20% unemployment, property taxes over 5%, and home values declining by 80% over the last decade, greed and incompetence from Harvey, Illinois’ government seem to have a higher priority over solving economic problems. A huge shortfall globally means millions of pensions aren’t safe. Next: It’s not a long trip to reach our next state in trouble. | Sean Pavone/iStock/Getty Images. A major pension crisis has made its way to Harvey, Illinois. It’s almost as much as our next state, but with less than half the number of pensions. The Sneaky IRS Tax Law that’s Sweeping the U.S. CNN is known for being VERY fake with their news and for pushing their false agenda on it’s viewers. Connecticut’s northern neighbor faces a similar pension crisis. 2020 Showbiz Cheat Sheet, All Rights Reserved. When Kentucky senior Senator and Majority Leader Mitch McConnell said this week that he would be in favor of allowing states to use the bankruptcy route to deal with their underfunded public pensions amid the pandemic emergency, state workers and retirees—already struggling with the economic and health crisis—were rightfully alarmed. Next: Where pension payments are 61% higher than the money put in. According to a mid-2017 report by Lombardi, all 50 states might experience profound pension challenges: “A study of the 649 different pension systems…found systematic problems with the assumptions underlying many trusts… This will have profound effects on citizens of all 50 states… In short, a pension crisis is in the works.”. Last Updated: February 17, 2020 12:48 pm. The state is more than $118 billion in the hole in total, thanks in part to paying out twice as much from the pension fund as it takes in. Looking at the investment return assumptions used by states, ALEC calculates how much the promised pension amounts exceed current assets to arrive at the shortfall. That’s why so many have already moved their savings into something that’s proved, time and time again, to protect against economic uncertainty: physical gold. Once the crisis completely unfolds, it may be too late to take advantage of this opportunity. The Flint water crisis, vanishing manufacturing jobs, a serial killer at large, and a massive pension shortfall are just a few of the many problems in Michigan. Public employees in New Jersey aren’t as lucky. How did things get so bad? The implosion of an outdated pension system could result in retirees losing all of their retirement benefits. Pennsylvania has a huge number of pension plans. Evan Comen. Almost all public pension funds assume investment returns somewhere around 7% (and some as high as 8%+). Born Edward Ahmed Hamilton Siedle, I grew up in Trinidad. © 2020 Forbes Media LLC. The state paid $11.8 billion to active pensions in 2016, but just $5.2 billion went in, which shows how Florida is one of the states making America’s pension crisis worse. CalPERS pays pension benefits to many retired public workers in California. Most of these funds have moved from defined benefit (final salary) to contribution-based benefits. Even having a huge tax burden can’t prevent Ohio from being one the states making America’s pension crisis worse. Next: Pension problems are another reason to hate this state. The Daily Patriot © 2017 | All Rights Reserved, Incoming Majority Whip Doesn’t Support Wall Funding, Pension Crisis to Affect Citizens of All 50 States. There is zero cost and zero obligation to you – we’ll even pay for shipping. Merck and Johnson & Johnson, two New Jersey-based corporations, are two of the few companies that still give out pensions, and employees love them for it. Next: Local pension plans outnumber state plans five to one. For the 737,000 people on public pensions, the $226.5 billion funding shortfall is another reason to hate the Sunshine State. New Jersey governor Phil Murphy has inherited a serious pension shortfall. Washington has 10 state-level pension plans. ... > Total pension shortfall: $9.1 million surplus (2nd smallest) But remember, you must act soon. October 11, 2019 3:59 pm. The state has 176,674 current and former employees taking pensions (also the smallest number on our list) as of 2016, yet with 212 total plans and more than $127 billion in shortfalls, this small New England state is one of the states making America’s pension crisis worse. Like its neighbor Connecticut, Massachusetts is also facing a pension shortfall.| Sean Pavone/Getty Images. 1 among states making America’s pension crisis worse, and it’s not even close.