Are we witnessing a slow-mo run on the pension system? I’m in the early stages of figuring this out by reporting on the incredible demise of the New Jersey state fund, one of the ugliest messes ever. Here’s what I wrote about it for Barron’s”
More municipal workers are looking at the sorry state of government finances and clocking out for good. Usually, this is “cause for celebration,” says actuary John Bury, author of the Burypensions Blog. States replace older workers with cheaper ones, and—voila!–instant savings. But if pensions are less than fully funded, the quickening exodus could mean trouble.
Topping the trouble list: Bury’s home state, New Jersey. Last year, the budget-challenged state saw a 60% jump in public retirees. If state and local workers are smart, nearly 60,000 more will leave this year, avoiding givebacks of some $250,000 in benefits per person, estimates Bury. Republican Gov. Chris Christie is proposing that workers chip in more for those costs.
More to come on this. Click here for the rest of the item.