State, county, and municipal governments face "ticking time bombs" in their pension plans because of all the aging baby boomers in their workforces, according to Stateline.org, a website the covers state governments.
Prompted by fears that the boomers will bust state budgets when it comes time for their payouts, leaders in some states are trying various ways to revamp their public employee retirement systems, the website reports. It cites one estimate that under their current systems, governments will come up $292.4 billion short in fulfilling their retirement promises to employees.
The Council of State Governments, a bipartisan umbrella organization for state government officials, estimates that the vast majority of states' retirement plans for their employees are under funded.
Sujit CanagaRetna, a fiscal analyst with CSG, told Stateline.org that state officials are just beginning to recognize the problems lurking in their pension programs, in part because states have been preoccupied since the 2001 economic downturn with balancing their books and closing a $235 billion budget gap.
To limit their pension debts, five Republican governors this year championed proposals to mimic the private sector by moving state employees from traditional pension programs--with guaranteed payouts--to 401K-style programs, where the state contributes a set amount each month to an employee's investment fund. When employees retire, the money in the fund is theirs.
Read the Stateline.org article here.