Pension Crises Growing

Pension across the country are coming under pressure with their investment portfolios still counting on rates of return that seem less than likely to materialize over the next decade. Public pension, including state and local governments are especially stressed. With interest rates at record lows where are these pension funds going to gett a return without chasing ris, moving forward?

"California, which has the largest U.S. public-pension fund, faces liabilities that may exceed its annual state-tax revenue fivefold within two years unless lawmakers rein in benefits, according to a study.  To keep their promises to retirees, the California Public Employees Retirement System, the biggest plan, the California State Teachers Retirement System, the second-largest, and the University of California Retirement System may have combined liabilities of more than 5.5 times the state’s annual tax revenue by fiscal 2012, according to the study released today by the Milken Institute. Levies are forecast to reach about $89 billion in the year that began July 1."

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States cutting Pension benifits

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States cutting benefits for public-sector retirees

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Since 2008, New Jersey and at least 19 other states from Wyoming to Rhode Island have rolled back pension benefits or seriously considered doing do — and not just for new hires, but for current employees and people already retired.

It's not just a U.S. phenomenon. In France on Wednesday, lawmakers voted to raise the retirement age from 62 to 65. If the measure wins final approval, France will become the latest European Union country to require workers to stay on the job longer because of a deficit-plagued pension system.

New Jersey's governor spelled out the details of his proposal Tuesday after telegraphing his intentions for months. They include: repealing an increase in benefits approved years ago; eliminating automatic cost-of-living adjustments; raising the retirement age to 65 from 60 in many cases; reducing pension payouts for many future retirees; and requiring some employees to contribute more to their pensions.

"We must reverse the damage caused by fairy-tale promises that have fattened benefits and pensions to unsustainable levels," Christie said.

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http://news.yahoo.com/s/ap/20100915/ap_on_bi_ge/us_pension_headaches