A new study finds that some public pension funds are in such bad shape that they might be totally depleted during an economic downturn
CHERRY HILL, N.J. (AP) — A new study has more bad news about public pension funds, finding some are at risk of running dry in a slowing economy.
In a report released Thursday, researchers at The Pew Charitable Trusts say Kentucky and New Jersey are the most vulnerable based on tests of various market conditions. Pew ran its so-called stress test for the pension funds in 10 states.
If its pension fund is depleted, a state would have to pay retirees from workers’ contributions and the current budget rather than from investments. In New Jersey, that could cost taxpayers $2 billion or more annually above what they already are expected to pay.
The report finds that some states, including Wisconsin and North Carolina, have systems designed to keep pensions afloat even when investments fall short.