Unfunded pension liabilities are a major part of the problem for this and most other States. The total deficit for such schemes nationally was $3.04 trillion in mid-2008, according to this February 2010 study by Andrew Biggs of the American Enterprise Institute. Illinois has the fifth-worst (40%) underfunding in proportion to State GDP (fig. 6, page 48).
Of more concern to a long-term bear like me is where those funds, inadequate as they may be, are invested. Here's Figure 1 of that study:
If' like me, you fear that both stocks and bonds will be hit badly when the credit crunch finally matures into a lender's strike, then a radical revision of pension entitlements is on the cards.
Disclosure: None
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.
No comments:
Post a Comment
Unfortunately, because of a plague of spam comments, you need to be a "registered user", otherwise your observations will be buried in a torrent of multilingual nonsense. Please do comment!
Say what you please, so long as it's phrased politely and is not libellous or legally proscribed. Fact, reason and wit are keenly welcomed.