Public Pension Funds – Who Will Pay?

The trouble with one public pension fund in the US;

"For the Chicago Transit Authority’s pension fund, the problems are real now. A recent study showed that the plan, which covers nearly 20,000 people, could run out of money for retiree health care in early 2007 — and that the money to pay pensions could be gone by 2012.

“There were decisions taken years ago that seemed harmless at the time, but now they’re very problematic,” said John V. Kallianis, the plan’s executive director.

One was the decision in 1980 to start paying retiree health benefits without setting aside enough money to cover the cost. “Anyone who has embedded their obligation for their retiree health plan in their pension fund and doesn’t think it’s going to be a big drain on the assets of that pension fund is crazy,” said Lynn E. Turner, a former chief accountant for the Securities and Exchange Commission who is now managing director of research at Glass, Lewis & Company, a proxy advisory firm.

- Paying Health Care From Pensions Proves Costly

Other articles from the series Costly Promises;
Public Pension Plans Face Billions in Shortages
New York Gets Sobering Look at Its Pensions
City Foots Bill as State Upgrades Pensions
Cost of Pensions Adds to Factory Town’s Troubles

Podcasts;
Crisis of Abundance: Rethinking How We Pay for Health Care
Medicare Meets Mephistopheles