By Robert Hennelly
CBS Money Watch
While the Greek and Puerto Rican debt meltdowns command world attention, most American states are grappling with how to cover between $1 trillion to $4 trillion in unfunded pension and health care liabilities, according to experts.
The range of the unfunded liability number can be explained by variables like the assumed rate of return on pension investments and variations in economic forecasts. Yet even at “just” a trillion, that’s still a very big number.
This month a report from the Pew Charitable Trust estimated that the nation’s state-run pension systems face close to a trillion-dollar shortfall, with at least 27 states confronting at least a $10 billion gap. “If we add in the unfunded health care commitments for public workers, there’s another $600 billion out there in unfunded liabilities,” said Greg Mennis, with the Pew Charitable Trust.
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