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US Retirement Benefits Underfunding Rises To Record $1.4 Trillion

Tyler Durden's picture


The Pew Center has released its annual summary of US pension and retirement health care (under)funding. As of 2010, the total underfunding gap rose by $120 billion from the prior year's $1.26 trillion deficit to a record $1.38 trillion underfunding. This number consists of $757 billion in pension promises, not backed by any hard cash, representing pension liabilities of $3.07 trillion and assets of $2.31 trillion. In 2000, more than half of the states had their pensions 100 percent funded, but by 2010 only Wisconsin was fully funded, and 34 were below the 80 percent threshold—up from 31 in 2009 and just 22 in 2008. But that pales in comparison to the ridiculous spread between retiree health care liabilities of $660 billion and assets of, drum roll, $33 billion, or a funding shortage that is $627 billion, roughly 19 times the actual assets in the system! Just seven states funded 25 percent or more of their retiree health care obligations: Alaska, Arizona, North Dakota, Ohio, Oregon, Virginia, and Wisconsin. What this means is soon US pensioners will have no choice but to experience not only austerity unlike any seen in Europe, but broken promises of retirement benefits which will never materialize. The response will likewise be proportional.

Sadly, it is only going to get worse:

The plunge in tax proceeds during the recession made it even harder for states to make their annual retirement contributions. Tax revenues are up in most states but have not returned to previous levels. At the same time, competing, non-pension costs such as Medicaid are rising. Often, elected officials must choose among funding retirement benefits, raising taxes, or paying for schools, roads, and public safety.

Who will pay for the underfunding? In short: someone else:

Overall, states should have set aside nearly $51 billion to pay for these promises in fiscal year 2010, but they contributed just over $17 billion—about 34 percent of what was annually required. Only Arizona made the full contribution to pay for retiree health care and other non-pension benefits. Thirty six states set aside less than half.

Visual summary of Pension obligation funding...

And this is the good news. Behold US retiree health "benefits", or rather, the complete lack thereof. The really bad news? New Jersey has 0.0% of its retiree health benefits funded ($71 billion needed), while California has at 0.1% of its $77 billion in funding needs "covered."

Those who wish to find out more, which would mean everyone both politicians, those in charge, and everyone who believes they will actually get the benefits they have been promised, can read more here.


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Mon, 06/18/2012 - 22:44 | 2538277 junkyardjack
junkyardjack's picture

I thought Fox said that Obamacare would have death panels, won't that fix the retirement benefits problem?

Mon, 06/18/2012 - 22:49 | 2538293 Buckaroo Banzai
Buckaroo Banzai's picture

No, that would require death squads.

Mon, 06/18/2012 - 23:33 | 2538439 Manthong
Manthong's picture

The Progressive solution to everything is Green Energy..

of the Soylent variety.

Mon, 06/18/2012 - 23:49 | 2538472 AlaricBalth
AlaricBalth's picture

Off Topic: Tyler Durden of Zero Hedge has been deemed the 2nd most dangerous person (to TPTB) in financial media by HuffPost.

" The original comic book supervillain of the financial web, complete with mysterious origin story and an evil intellect that literally defies you not to pay attention. Durden's work is cited everywhere from Tom Keene's radio show on Bloomberg to anarchist meetings taking place in parking garages and vacant lots across America. Whenever I meet people and tell them I'm a blogger, the very first question they ask (in whispered tones) is whether or not I know Tyler."

Max and Stacy were a close first.

Mon, 06/18/2012 - 23:55 | 2538487 Dr. Engali
Dr. Engali's picture

I can't believe Tyler runs second behind Max. The Hedge stands head and shoulders above Max

Mon, 06/18/2012 - 23:57 | 2538495 Dasa Slooofoot
Dasa Slooofoot's picture

Max's global warming support/trolling probably pushed him ahead in the eyes of the huffpost.  ;)

Tue, 06/19/2012 - 00:01 | 2538497 Harlequin001
Harlequin001's picture

Prepare to work, all your life...

so that those little old folks you help cross the road can have a comfortable end to a really, really good one...

Tue, 06/19/2012 - 00:14 | 2538515 dwdollar
dwdollar's picture

They deserve it... according to them... like a Ponzi sucker deserves the next payout. Doesn't matter that the promise was too good to be true. Doesn't matter they never bothered to know how the promise would be fulfilled. They deserve it. Now suck it up and find a 3rd minimum wage job to pay for their posh retirements. And I don't want to hear any bitching that there's only 24 hours in a day. Make more hours.

Tue, 06/19/2012 - 00:40 | 2538565 Colombian Gringo
Colombian Gringo's picture

The only retirement plan that we can look forward to is hanging the banksters.

Tue, 06/19/2012 - 04:12 | 2538579 The Big Ching-aso
The Big Ching-aso's picture



Nowadays if U can retire at 70 people think you were a very successful supermarket bagger.


Tue, 06/19/2012 - 06:40 | 2538804 negative rates
negative rates's picture

And welcome to the real world.

Tue, 06/19/2012 - 00:23 | 2538538 macholatte
macholatte's picture

The shameless politicos are like a bunch of little children, a bunch of immature fuck-ups who say shit like this:

"I'm not responsible for my behaviour because you were bad first.  So don't lecture me and try to make me feel bad"


Asked by a Canadian journalist: "Why should North Americans risk their assets to help Europe?" he replied: "Frankly, we are not here to receive lessons in terms of democracy or in terms of how to handle the economy.

"This crisis was not originated in Europe … seeing as you mention North America, this crisis originated in North America and much of our financial sector was contaminated by, how can I put it, unorthodox practices, from some sectors of the financial market."


G20 summit: Barroso blames eurozone crisis on US banks


Tue, 06/19/2012 - 00:00 | 2538500 AlaricBalth
AlaricBalth's picture

WB7 also ranked highly. Great job!!!

Mr. Banzai7 joins the ranks of Arlo and Woody Guthrie, Banksy and all the rest of our favorite protesting folk artists with his almost daily blizzard of photoshop masterpieces on Flickr and throughout the financial blogosphere. Whether he's welding the heads of our most reckless bank CEOs onto the bodies of mythological villains or fusing the most despicable politicians into a Sergeant Pepper's album cover tableau, the man instinctively gets the concept of being both evocative and impactful with each new jpeg creation."

Tue, 06/19/2012 - 00:07 | 2538509 mcguire
mcguire's picture

i like Max K, but he is clearly serving an agenda.. the tip off for me was his support of julian assange and wikileaks as a legitimate enterprise, rather than what it is: a CIA/Mossad front.  

RT/MaxK/Soros/WeAreChange/Anonymous/OWS are all working the dark side of the dialectic... 


Tue, 06/19/2012 - 00:12 | 2538514 Dr. Engali
Dr. Engali's picture

I agree with that completely. He has a few areas where he lines up lockstep with TPTB. I personally think he is a phoney.

Tue, 06/19/2012 - 00:25 | 2538548 mcguire
mcguire's picture

controlled opposition.. 

Tue, 06/19/2012 - 07:38 | 2538840 GMadScientist
GMadScientist's picture

All the best cults are made from shunning the non-believers and the more ridiculous your bar for entry, the more fanatical the cult.

You: a monkey ready to be shot into space.


Tue, 06/19/2012 - 01:51 | 2538636 Dingleberry
Dingleberry's picture

Disagree. Been watching him for years. Watch his Iceland video (pre bust) where he explains what is going to happen chapter and verse (it did 2 years later) to the Icelanders themselves. Other vids too are great. We don't all agree on everything, nor is anyone always correct.  But this is the only guy that I see that has the technical financial knowledge, combined with honesty, passion and ability to communicate to us unwashed and unsophisticated masses. He was out front calling criminals criminals, not just idiots. He was out front speaking of CDS insurance and suicide diabolical bankers that would destroy themselves for a profit. Which they DID.  

Besides, who else has ever said "Goldman Sachs would take Aushwitz public" on a live television newscast??? Matt Taibi and nearly everyone else was very, very late to the party. But at least they are here now.  I don't view anyone or any blog better or worse.  ZH does what it does better than anyone. So does Max. 

Tue, 06/19/2012 - 02:29 | 2538662 CompassionateFascist
CompassionateFascist's picture

Yes, ex-JPM Max knows all about it from the inside; back when, kicked off the Street for insider trading. A lot of these critical outsiders are former insiders - ex-GS Nomi Prins, for instance. THey're not looking to get rid of the System...just "reform" it. Oh, and sell a lot of silver. Deep-tolling bell of self-interest.  

Tue, 06/19/2012 - 02:55 | 2538673 Clampit
Clampit's picture

So where does an elightened one take a leak? I don't think Wikileaks is a farce, but I certainly concede the posibility.

Which then leaves a dilema solvable by decentralized data dumps; P2PWifiMeshBitTorrentleaks anyone? The sender could stream video or interlace multiple nodes to speed up saved file delivery by the first layer audience size - could be handy in a crowded place without sovereign comfort. Old cracked iphones are starting to pile up...

Tue, 06/19/2012 - 02:36 | 2538667 Davalicious
Davalicious's picture

@Dasa Slooofoot - you nailed it. Max is great in some ways, but he is still a Jew. He is a shill for certain interests e.g. pro-Russian, and the Global Warming scam.

Tue, 06/19/2012 - 02:57 | 2538687 Id fight Gandhi
Id fight Gandhi's picture

Seems most on that list are "chosen" makes it all iffy

Tue, 06/19/2012 - 04:51 | 2538738 Troll Magnet
Troll Magnet's picture

max is not a jew you idiot. sheesh!

Tue, 06/19/2012 - 07:40 | 2538843 GMadScientist
GMadScientist's picture lack the mental accuity to light up an easy-bake oven.

Tue, 06/19/2012 - 00:41 | 2538547 TruthInSunshine
TruthInSunshine's picture

Alaric, thanks for that OT Link.


"Is it true," everybody asks. "[Are] Tyler Durden[s] building an army, Sir"?  "That's the word."

Congrats, Tylers & ZH. More and more people awaken to the fact that you're the real deal and that you rock!

Congrats to the Master of Modern Day Edgy Political/Financial Cartoons, a certain Mr. William Banzai, also, who came in at #10. wb7, keep on keepin' on!


10. Williambanzai7
  • "Mr. Banzai7 joins the ranks of Arlo and Woody Guthrie, Banksy and all the rest of our favorite protesting folk artists with his almost daily blizzard of photoshop masterpieces on Flickr and throughout the financial blogosphere. Whether he's welding the heads of our most reckless bank CEOs onto the bodies of mythological villains or fusing the most despicable politicians into a Sergeant Pepper's album cover tableau, the man instinctively gets the concept of being both evocative and impactful with each new jpeg creation."
Tue, 06/19/2012 - 00:44 | 2538571 CommunityStandard
CommunityStandard's picture

Haha!  We are one sad excuse for an army.  No offense guys, the comments are a great source of entertainment, but we all agree to disagree on pretty much everything.


But yes, congrats to ZH and WB7!

Tue, 06/19/2012 - 01:10 | 2538605 Michael
Michael's picture

I really like Stacy Herbert.

Tue, 06/19/2012 - 02:32 | 2538664 CompassionateFascist
CompassionateFascist's picture

Yes, she's the main reason I watch the vids at their site. That and Max's hysterical Yid act. 

Tue, 06/19/2012 - 05:23 | 2538754 i-dog
i-dog's picture

She looks good and sounds like a Marxist ... a dangerous combination....

Tue, 06/19/2012 - 05:29 | 2538757 Mitch Comestein
Mitch Comestein's picture

The synergy of Obamacare and green energy is to burn piles of elderly pensioners in a blast furnace for a clean fuel.

"Oh, you have the flu and your 80, you need to walk through the door at the back of the clinic.  Leave your watch, wallet, and co-pay on the table before you go."

Tue, 06/19/2012 - 07:43 | 2538847 GMadScientist
GMadScientist's picture

"Oh, you've been eating like shit for decades, smoking cigarettes, never exercised and now your arteries are clogged? Here, let me check our surgical rotation and see when we can work you in for that third bypass operation. Same insurance as last time? Mmm hmmm."

Stop pretending like you're saving money. They still end up in the emergency room coughing up blood.

Mon, 06/18/2012 - 23:36 | 2538445 sablya
sablya's picture

Wow, there's a boost to employment

Tue, 06/19/2012 - 00:49 | 2538577 monad
monad's picture

Obama does wonders for the black market. And the prison industrial complex, they pay him too.

Mon, 06/18/2012 - 23:42 | 2538462 max2205
max2205's picture

Tsa isn't very busy, use them, or the sec

Tue, 06/19/2012 - 08:38 | 2538925 LoneCapitalist
LoneCapitalist's picture

When the panel says grandma doesnt get the operation she needs, the grim reaper will be the death sqaud.

Mon, 06/18/2012 - 22:50 | 2538296 Michael
Michael's picture

The Ron Paul Supporter Put = Voting for Obama;

If I can coin the name for the new strategy.

Mon, 06/18/2012 - 23:26 | 2538419 Al Gorerhythm
Al Gorerhythm's picture

Very clever Mick. Let Obamney hold the bag and RP slip into them in '16, like a Greek politician on a boy. Trouble is, the US will get what the Greek people had rammed up their ass:- Austerity. The Republicans and the Democrats would simply form a coalition to beat down those upstart libertarians, just as the two traditional Red/Blue parties did in Greece. The Greeks didn't vote for more austerity. They, on a first-past-the-post basis, voted to reject the socialist's never ending spending spree of other people's. Their countrymen, like ours, will sell our soverignty and strip our nations of their wealth until we are penniless in the streets. There are plenty of penniless sovereigns, banks, businesses, retirement funds and citizens that we have seen fall, all through the absolutely fantastic centrally planned and managed socialist schemes that both teams have delivered. We're all socialists now.

Mon, 06/18/2012 - 23:44 | 2538464 TruthInSunshine
TruthInSunshine's picture

When the actual numbers are published one day, only because they will have to be, as pension funds are eviscerated, liquidated, bk'd or otherwise submerged, and the inevitable litigation, sparring and wars ensue, what now seems like an astounding amount of nearly 2 trillion USD will seem small by comparison.

I wouldn't be surprised if the actual number, in today's dollars, but only recognized...say....10 years from 3x this amount.

The biggest schism that risks opening up is the pensions of members of the very last bastion and literal Alamo of unions everywhere:  government workers at the local, state and federal level.

More Americans in the private sector, who do not have Mercedes Benz health care, pensions, health/dental/life insurance, and who make 1/2 on average of what equivalent federal workers make possessing the same (or far lesser) educations, and lower levels of training, work skills, and efficiency, are awakening to the fact that government workers are the gilded elite, who often have pensions that equal 120% of their highest salaries ever earned while working, and lifetime health/dental and life insurance for not only themselves, but their partners, too.

But I'm confident that congress, its OMB, the White House, and state legislators are going to 'get right on' this issue well before the reality that many of the future promised benefits will necessarily and inevitably be deemed null & void. Or maybe they'll just keep ignoring the issue, with the same ultimate outcome.


Tue, 06/19/2012 - 00:04 | 2538504 Manthong
Manthong's picture

"only Wisconsin was fully funded,"

Scott Walker must feel like Spiderman.. villified by the people he is helping.

Hear that, union sheep?

The guy you have spent so much time, energy and money trying to destroy is the only governor assuring you are secure in your retirement.

Tue, 06/19/2012 - 00:14 | 2538519 otto skorzeny
otto skorzeny's picture

get something straight- the only union sheeple that support AFSCME and teacher's union scum(Chicago teacher's union-led by the fattest, blackest POS ever-are headed for a showdown this fall) are other govt worker leeches- us private union employees (except for UAW) are going the way of the dodo bird.I actually sent Walker some $ hoping that his victory would sober up the pols here in IL

Tue, 06/19/2012 - 02:06 | 2538645 Freddie
Freddie's picture

Scott Walker is a good guy.  From what I can tell - he is a real conservative not like those RINO fakes like Rubio, Newt, Romney, Rove, Bush, et al.   Scott Walker would make a great President but the whole thing is pretty much screwed now.


Tue, 06/19/2012 - 07:56 | 2538857 GMadScientist
GMadScientist's picture

He'd take orders from the Koch Bros like the best of em.

Mmmmm....fascist boots!

Tue, 06/19/2012 - 02:08 | 2538649 taniquetil
taniquetil's picture

Fun Fact:

Chicago Public School teachers have the highest average salary ( of any public school system in the US and have an average salary of $70K+ ( They are currently striking to bump the average salary to $90K.

Pieces of shit.

Tue, 06/19/2012 - 02:38 | 2538670 CompassionateFascist
CompassionateFascist's picture

In all candor, I think doing a little mid-day babysitting for a roomfull of stupid, violent Trayvons and Latwanas is worth every bit of $90 G/yr. And I still wouldn't do it w/o a whip in one hand and a gun in the other. 

Tue, 06/19/2012 - 03:45 | 2538710 AldousHuxley
AldousHuxley's picture

spend the money to export low IQ high violence kids back to Africa. The motivated ones will find a way back via Mexico.

Tue, 06/19/2012 - 04:12 | 2538723 Blankenstein
Blankenstein's picture

Here she is in action, making fun of the U.S. Education Secretary, Arne Duncan's lisp.

Tue, 06/19/2012 - 04:22 | 2538726 Blankenstein
Blankenstein's picture

She also criticizes Arne Duncan for "probably" not taking math and science classes.  Well, Karen did you take any??  Becasue the money for the pay increase is not there, nor is the money for those golden pensions.  Chicago and Illinois are toast.

Tue, 06/19/2012 - 07:50 | 2538855 GMadScientist
GMadScientist's picture

"the only governor assuring you are secure in your retirement"

I'm not sure how giving tax incentives to other companies and stripping collective bargaining rights is supposed to make anyone secure in anything (other than Wisconsin bondholders, of course). And it's difficult to have a secure retirement when you've been laid off or have to spend all your income offsetting your dwindling healthcare benefits.

But I'm sure those companies Mr. Walker is currently sucking off in the smoky backrooms of Milwaukee will all be amazing success stories and create thousands of jobs (just not for the people who were laid off, but you know...details are for people who can think).

You're an asspony for the Koch Bros and will get exactly what you deserve for being so incredibly ignorant of history.

Tue, 06/19/2012 - 06:47 | 2538809 Unbezahlbar
Unbezahlbar's picture

Just place those assets in a 'High Yield Savings" account of 0.03% and you'r all set. No problem...just live off that fat interest income the Fed is giving you.

Tue, 06/19/2012 - 07:11 | 2538820 Arnold Ziffel
Arnold Ziffel's picture

TIS, you speak with silver tongue. "When Money Dies" by Adam Fergusson writes about how Weimar's public unions faired much better then the private sector (self-employed) b/c they paralyzed the gubbermit with stikes, threats, etc. in order to demand (and received)higher wages because of Weimar's hyperinflation in the early 1920's.

I think we will see the same/similar with expansion of the Fed's balance sheet another 236% and many more $3,000 give-aways for 'thingamajigs' in the coming months (maybe even more free golf carts) since a politican's first loyalty is to----himself; i.e., to get re-eleced. After all, we still  see zero down loans being handed out and EZ Credit all around us. People who declared bk last year are now getting credit card apllications again in the mail.....anything to buy votes. Let the printing presses's just a matter of timing and wording.






Tue, 06/19/2012 - 07:34 | 2538838 kralizec
kralizec's picture

Allowing government unions to begin with was a fuckup of gargantuan proportions...and while it is obvious to most sentient beings that a century of unrelenting progressive idiocy needs to be unraveled...too many of its bastard children are still under its nefarious spell.

Tue, 06/19/2012 - 01:03 | 2538595 Peter Pan
Peter Pan's picture

There are no more nations in the eyes of bankers and politicians. Just farms, quarries and workers which are to be used, stripped, sold and traded for another buck. We have known about unfunded pension and medical schemes for quite some time. Treatment will not be refused but you will have to get on a waiting list which might line up with your expected date of death. People are now beginning to reap what they voted for.....promises and empty ones at that.

Tue, 06/19/2012 - 03:47 | 2538711 AldousHuxley
AldousHuxley's picture

bankers still need protection......military defense is what nations still provide.


US bankers can own many within the empire, but still the valuable assets in Russia, China, and even Europe are only for the native banks.

Tue, 06/19/2012 - 01:59 | 2538642 Freddie
Freddie's picture

Anyone notice the little amnesty two step between Obama and Marco Rubio/Rove/Romney/RINO GOP/Bush/fake conservatives/fake Tea Party.   Rubio is for amnesty like Obama.  No difference.   Newt and Romney were backed by Adelson to block Paul or Santorum.  

There will be nothing left in 2016 is the Kenyan gets back in.

Tue, 06/19/2012 - 02:40 | 2538672 CompassionateFascist
CompassionateFascist's picture

The only thing that will fundamentally change America for the better is Civil War. Therefore, Barack's got my HardRight vote. 

Tue, 06/19/2012 - 05:39 | 2538765 Redhotfill
Redhotfill's picture

Couldn't we just offer up free Cool-aid / or "Grape Drank" ala Jonestown in the appropriate neighbohoods? and save ourselves most of the physical destruction?  Hmn that Newt-tron bomb is looking pretty useful these days.

Tue, 06/19/2012 - 07:22 | 2538827 Offthebeach
Offthebeach's picture

It was Flavor-Aid brand sweetener. It was cheaper. Even offing people can get expensive and will require Chinese funding, especially if it becomes a fedgovuno racket.

Tue, 06/19/2012 - 07:57 | 2538859 GMadScientist
GMadScientist's picture

Yes, start in The Hamptons.

Tue, 06/19/2012 - 09:47 | 2539174 Jani
Jani's picture

As a native Long Islander that made me smile.

No better place to start culling the bankster herd while they while away their time spanking their monkeys at the beach.

Tue, 06/19/2012 - 10:38 | 2539374 ParkAveFlasher
ParkAveFlasher's picture

+100 No really, they DO spank their monkeys on the LI beaches.  Here I was going for a nice walk along the beach - Robert Moses along to Fire Island - with the wife and then OMG THAT GUY ISN'T FISHING.

True story.  Buried memory. 

Tue, 06/19/2012 - 07:39 | 2538842 kralizec
kralizec's picture

I would prefer a negotiated separation into new indpendent entities of like-minded states...let the asshats wither and die as it were...natural selection at its finest.  But the last thing any faction desires is a reasoned approach to our problems.  Another civil war is inevitable.

Tue, 06/19/2012 - 01:41 | 2538627 OneTinSoldier66
OneTinSoldier66's picture

If Obama gets re-elected the only people that can be blamed are the people that voted for Obama!

Mon, 06/18/2012 - 23:05 | 2538343 Eireann go Brach
Eireann go Brach's picture

Obama said to send the elderly a bunch of Thingamijigs to keep them amused!

Tue, 06/19/2012 - 07:58 | 2538861 GMadScientist
GMadScientist's picture

That was Bush. It's called Medicare Part D.

Mon, 06/18/2012 - 23:22 | 2538399 stocktivity
stocktivity's picture

"The Pew Center has released its annual summary of US pension and retirement health care (under)funding"

The Pew Center...that's fitting...It's all Bullshit!

Mon, 06/18/2012 - 23:45 | 2538467's picture


I thought Fox said that Obamacare would have death panels, won't that fix the retirement benefits problem?


Obama advisor Robert Reich said that Obamacare would have death panels. And then the Berkeley crowd cheered.



Tue, 06/19/2012 - 12:12 | 2539201 Bob
Bob's picture

If you're very old, we're not going to waste all the expensive technology and [treatment] to keep you alive for a couple more months.

Everybody knows that money is "wasted."  This profound breathless reverence for human life seems conveniently facile for the people who are fine (actually, "morally" self-righteous) about leaving 50% of the population to their own devices--i.e., no health coverage except ER drive-throughs. 

Seems sometimes "life" is all about the money.  And then that's a good thing. 

Of course, that's for the people with the deep insurance coverage who plan to squeeze every last penny from the pool to extend their "golden vegetable years."

But the "health" industry machine must be fed.  At least it meets the "Liberty" test, I guess.

God Bless America.

Tue, 06/19/2012 - 00:01 | 2538468 vast-dom
vast-dom's picture

very sad. i guess bailing out banks is more important than taking care of many of the very people that bailed out said banks <-> governments. biz as usual. 

Tue, 06/19/2012 - 00:13 | 2538518 mcguire
mcguire's picture

more than just sad... it is evil.  pure evil.  it will all soon boil over, we are at the tipping point... those in power KNOW that we are heading for the tipping point (they have been driving us there), and they have already worked out what they want to accomplish (the new world order) from the coming chaos..

there is only one way to fight evil and win..

Tue, 06/19/2012 - 05:25 | 2538750 Disenchanted
Disenchanted's picture




Oh yes banksters, Israel, and the war machine/war profiteer gang(but I repeat myself), are fully funded.

Fuck the pensioners, they should plan on working until at they're least eighty anyways...per AIG's Benmosche.


edit: speaking of which...just saw this from 2009:


(Reuters) - Wearing flip-flops, khaki shorts and a green polo shirt, the new chief executive of bailed-out insurer American International Group Inc says he's getting a lot of work done from his massive villa overlooking the Adriatic.

Mon, 06/18/2012 - 22:46 | 2538282 CrownThomas
CrownThomas's picture

It's all good - the market will return 7.5%, and they'll make up for it. You can still retire at 55 with 90% of your top salary.



Mon, 06/18/2012 - 23:16 | 2538376 disabledvet
disabledvet's picture

you could "go for it" in the CALPER's sense of term. With the value of Apple skying obviously the won't have any funding gaps for the forseeable future. having said that i imagine ending up with 90% weighting in your pension fund in equities...with half of that in Apple computer...could end up getting noticed by "one of those important people." having said that most pensions use treasuries as their primary if not sole asset class. since Treasuries have SOARED in value the value of some of these pensions is quite extraordinary. still..."the payouts are a problem" given the lack of an interest rate return as well. the health care side is a whole 'nother ball of wax...and i'll leave that to the experts. or is it ex-pats? anywho we're going to have one hell of a Supreme Court ruling coming up concerning the Federal "mandate" to create a fund for someone else's healthcare. With interest rates this low i'm surprised the Insurance Companies have been able to keep their premium increases this high for this long. Methinks it's all about to change however as these prices are set to come down dramatically. Another interesting area you might want to explore is the "murky world of a guaranteed investment return." I believe they're called "annuity's"...yet another area for the Tylers' Durden to apply their expertise should they wish. Good article.

Tue, 06/19/2012 - 05:22 | 2538753 mjk0259
mjk0259's picture

Annuities were probably a good investment when interest rates were 10%. Most of them charge 3% a year in fees which is about all they can get for investing the money in something safe. I looked at some recently and I figured the internal rate of return was 0%. i.e. If I live the expected amount I get the money back. Not counting inflation.  If you change your mind, heavy penalties to get any money out. Only good if you expect to live greatly longer than average and there to be little inflation over that time.


Tue, 06/19/2012 - 02:09 | 2538650 taniquetil
taniquetil's picture

We are clearly entering an age of prosperity where markets can only go up. The naysayers are too dumb to realize that this time is different. Dow 50,000, you heard it here first.

Tue, 06/19/2012 - 04:27 | 2538728 Blankenstein
Mon, 06/18/2012 - 22:47 | 2538283 valkir
valkir's picture

Well,i have got solution.Instead ze Germans to take pensions of age 67,we can push them to work untill 87.As i said we,tryed to save space,put banksters.

Tue, 06/19/2012 - 02:44 | 2538674 CompassionateFascist
CompassionateFascist's picture

As the boss said at my old NYC bike messenger co., "Ride Until U Die". 

Mon, 06/18/2012 - 22:48 | 2538290 Dead Canary
Dead Canary's picture

How can I get a job on one of those death panels? I have my own, ahem... equipment.

Mon, 06/18/2012 - 23:45 | 2538466 mr. mirbach
mr. mirbach's picture

They will be staffing exclusively from the best and brightest at the TSA. 

Tue, 06/19/2012 - 01:34 | 2538623 Dr. Sandi
Dr. Sandi's picture

Oh, him?

Tue, 06/19/2012 - 08:01 | 2538864 GMadScientist
GMadScientist's picture

By "brightest" I'm going to assume you mean some kind of Albedo effect from perspiration.


Tue, 06/19/2012 - 09:00 | 2539007 Uncle Remus
Uncle Remus's picture

I read "Albino".

Mon, 06/18/2012 - 22:49 | 2538294 Bunga Bunga
Bunga Bunga's picture

Why save for retirement? Either way, that money will be gone and we have work till 80 anyway. Better invest it it in healthy living and education of your children.

Tue, 06/19/2012 - 03:55 | 2538717 AldousHuxley
AldousHuxley's picture

just rob a bank at retirement age and you get free housing + TV + gym + books + healthcare at your local penitentiary.

Tue, 06/19/2012 - 05:42 | 2538767 Redhotfill
Redhotfill's picture

If they catch you. By the time I retire the sheeple will be so dumbed down they will wheel out the cash to my truck and thank me for relieveing them of the burdensome currency.

Tue, 06/19/2012 - 07:31 | 2538836 Offthebeach
Offthebeach's picture

Or locked in some low rent death trap nursing home, stuffed to the gills with big pharma, sitting in two day crap watching Jerry Springer with the illegal staff.
Prison souds better.

Tue, 06/19/2012 - 08:03 | 2538868 GMadScientist
GMadScientist's picture

What color would you prefer to be beaten by in your dotage?


Mon, 06/18/2012 - 22:49 | 2538295 RobotTrader
RobotTrader's picture

Just watch when these funds start peeling off bonds and start chasing low priced equity screamers. There will be a desperate bid to "make their year" by piling back into stocks.

Could see some breathtaking moves, especially in the beaten down groups like coal, oil service, shipping stocks, personal computer stocks, etc.

Mon, 06/18/2012 - 23:21 | 2538397 rosiescenario
rosiescenario's picture

I am actually very surprised we have not seen a flood, as in tsunami, of money coming out of Europe into our perceived safe haven. Fully expected by now to see the DOW types lift off due to that....has not happened yet.


Not that I am saying our market is a safe haven, but if you were Spanish, it might appear that least for the time being.

Mon, 06/18/2012 - 23:40 | 2538454 Dr. Engali
Dr. Engali's picture

Coal stocks? When Obummer is targeting them for bankruptcy ? Personal computers? Do people use them any longer in the age of the iPad ?Dell probably won't be around in a couple years.

Tue, 06/19/2012 - 00:16 | 2538526 otto skorzeny
otto skorzeny's picture

I'll load up on coal stocks the day Obummer leaves office

Mon, 06/18/2012 - 23:58 | 2538496 bnbdnb
bnbdnb's picture

Yes. I love throwing my money around like monkeys and their poop.

Tue, 06/19/2012 - 08:05 | 2538872 GMadScientist
GMadScientist's picture

Don't throw the monkeys. That's not cool.

Tue, 06/19/2012 - 02:03 | 2538643 Freddie
Freddie's picture

This is exactly what the Texas Teachers Pension is doing.  Their "plan" is to overweight in OTC small cap.  I am not kidding.  It is a $100 billion fund and is underfunded.

Mon, 06/18/2012 - 22:50 | 2538299 Rogier
Rogier's picture

So the USA really ís Uganda...

Tue, 06/19/2012 - 01:35 | 2538622 mkhs
mkhs's picture

I thought we were trying for Zimbabwe?

Tue, 06/19/2012 - 02:10 | 2538651 Offthebeach
Offthebeach's picture

I'd take Idi Amin over Obama.

Mon, 06/18/2012 - 22:52 | 2538302 bad craziness
bad craziness's picture

..and in supreme irony the only way the responsible states can retain their relative responsibility to the profligate ones is to buy physical gold and gold miners.  The money printing to come to cover the shortfall will destroy the good work they have done.

Mon, 06/18/2012 - 22:54 | 2538310 BlackholeDivestment
BlackholeDivestment's picture

...I give that image a Purple Heart. Lol.

Mon, 06/18/2012 - 22:56 | 2538318 cherry picker
cherry picker's picture

If all the old people, such as myself, voluntarily kicked the bucket in the name of patriotism, it would solve the problem and we would be heroes and maybe recieve a posthumus medal our descendants can take to a pawn shop for coin to buy food.

Mon, 06/18/2012 - 23:48 | 2538475 Dr. Engali
Dr. Engali's picture

Well I hope that doesn't happen. As I approach 50 I can always look at an elderly person and think... "well at least I'm not as old as that guy".

Tue, 06/19/2012 - 00:23 | 2538544 Real Estate Geek
Real Estate Geek's picture

Per The Onion,


Social Security Reform Bill Encourages Americans to Live Faster, Die Younger.

Tue, 06/19/2012 - 06:11 | 2538784 Caggge
Caggge's picture

The should remove the taxes from cigarettes. Make em cheaper so more people smoke and die sooner.

Mon, 06/18/2012 - 22:58 | 2538323 thatthingcanfly
thatthingcanfly's picture

This is all FDR's fault.

Mon, 06/18/2012 - 23:05 | 2538341 Stackers
Stackers's picture

Come on now. Lets not sell LBJ short here. That complete ass-wipe of a human being did more than his fair share to destory America

Mon, 06/18/2012 - 23:44 | 2538463 A Nanny Moose
A Nanny Moose's picture

How did we ever elect someone with BJ in his initials?

Mon, 06/18/2012 - 23:51 | 2538481 r00t61
r00t61's picture

I enjoy ripping on Woodrow Wilson, myself.

Tue, 06/19/2012 - 00:28 | 2538551 Real Estate Geek
Real Estate Geek's picture

How?  Well, first they assassinated his boss . . .

Tue, 06/19/2012 - 02:37 | 2538669 Freddie
Freddie's picture

Well we didn't.  LBJ wanted the job from JFK because Vietnam was too big of a money goldmine for LBJ and his cronies in Texas.  LBJ loved money and power. He got even richer off Vietnam.

The almost as equally corrupt Kennedys tried to double cross LBJ like they double crossed the Mafia and the Cuban refugees.  Joe Kennedy picked LBJ to win Texas against Nixon.   Daddy Joe made a deal with the devil but it was not the first time.

LBJ had a lot of dirt and crime including murders in TX.  Somebody was pushing to get LBJ indicted for one of his scams and murders and they were getting close.  LBJ and his crew took matters into their own hands.  Maybe Lyndon wanted to also give Jack a little Marilyn payback from the afterlife too.

Tue, 06/19/2012 - 15:55 | 2538473 BlackholeDivestment
BlackholeDivestment's picture

...what, slaughtering Liberty is not a revelation of the usual suspects? LMAO. 

...uh, that's USS Liberty for you mmm mmm Muppet Show Sheep Dippers in the House Gallery.

Dial WTC One; (911) 666-ADD=Debt. Ask for Dimon Dog, then say ''Silver Surfer loves the Comedian'' . Then, listen for the response code (con)formation words; ''QE2 Floats Like the Titanic bound for Germany'' You should hear a click and then this background music>>>,or.r_gc.r_pw.r_qf.,cf.osb&fp=61e359e52f42c881&biw=1280&bih=675

 ...if you get hungry trying to understand the parable, let me ''change'' your usual ''take out'' order, I will give you a new world order you cannot refuse, lol, like the First born Drag Queen's wife on the grill named'' Peace With God'', AKA Suicide Vampire Squid Makes Country Time Lemon Aid With High Fructose Corn Syrup And Breakss Hip. 

P.S. Order up some Wormwood and ...fries with that, but, don't eat the Fruit, it's too high a price. 

Company Halt! Parade Rest! Retire! 

Mon, 06/18/2012 - 23:54 | 2538485 mr. mirbach
mr. mirbach's picture

au contraire - Congress passed the Revenue Act of 1978 during the phenomenal presidency of Jimmy Carter - That is when the mess started by the Federal Reserve Act of 1913 started gettinig fucked up-er.

Mon, 06/18/2012 - 23:00 | 2538326 monad
monad's picture

We in America are going to do it right. We'll have 60 y.o. suicide bombers dying for the cause, not horny, doable youngsters.

Mon, 06/18/2012 - 23:01 | 2538329 Stackers
Stackers's picture

Anyone else notice Californias pension liability is a minimum of 300% larger than anyone elses ?

Mon, 06/18/2012 - 23:05 | 2538342 slewie the pi-rat
slewie the pi-rat's picture

i had some cherries while reading this

and some really stinky welsh cheese

and some fresh hot coffee

and some chronic

looks to me like if doctors just cut  their fees by 95%  that takes care of the worst of it...

Mon, 06/18/2012 - 23:18 | 2538384 kridkrid
kridkrid's picture

Nice spread.

Mon, 06/18/2012 - 23:26 | 2538421 yabyum
yabyum's picture

Food groups covered!

Mon, 06/18/2012 - 23:42 | 2538442 Meatballs
Meatballs's picture

Healthcare is a disaster area. It's not just doctor fees. Think about this (I know, difficult with chronic :) Name me another business anywhere where the cash customer is heavily penalized. The network contracts are a travesty, the drug business is no differernt than the street drug business except they have licensed bartenders and the pricing structures are the inside joke of all time- with rebates that are nothing more than kick-backs negotiated for the chosen (read: not taxpayer). Until Wall St. is taken out of the healthcare equation, nothing good will happen and they know it- in a recent speech the CEO of Aetna said as much and he's still standing. Obamacare when broken down has some decent aspects to it but is ultimately a sell out and it's not going to get the job done.


*And it you want to junk me on the Obamacare statement, go read the bill first (I have). Don't rely on Fox News talking points or those of its creator- Mittens & Company. 

Mon, 06/18/2012 - 23:53 | 2538483's picture

Obama adviser Robert Reich said that young people should be forced to pay more and be left to die when they get old. Nice plan.

Tue, 06/19/2012 - 01:38 | 2538625 Dr. Sandi
Dr. Sandi's picture

Don't start knocking the Reich!

Tue, 06/19/2012 - 02:16 | 2538656 Offthebeach
Offthebeach's picture

Gov run death camps would be cheepest. Maybe next to high-speed rrail lines.

Tue, 06/19/2012 - 03:59 | 2538719 AldousHuxley
AldousHuxley's picture

you don't want to live past 80....

japenese elderly over age of 100 have highest rate of suicide.....bring on the death camps.

no need to drag out the ending for years

Tue, 06/19/2012 - 12:11 | 2539312 Bob
Bob's picture

Reich's statement:

If you're very old, we're not going to waste all the expensive technology and [treatment] to keep you alive for a couple more months.

Everybody knows that money is "wasted."  This profound breathless reverence for human life seems conveniently facile for the people who are fine (actually, "morally" self-righteous) about leaving 50% of the population to their own devices--i.e., no health coverage except ER drive-throughs. 

Seems sometimes "life" is all about the money.  And then that's a good thing. 

Of course, that's for the people with the deep insurance coverage who plan to squeeze every last penny from the pool to extend their "golden vegetable years."

But the "health" industry machine must be fed.  At least it meets the "Liberty" test, I guess.

God Bless America.

Tue, 06/19/2012 - 00:20 | 2538534 dwdollar
dwdollar's picture

"Obamacare when broken down has some decent aspects to it but is ultimately a sell out and it's not going to get the job done."

Haha... Doesn't that describe 99% of the billshit that comes out of CONgress?

Mon, 06/18/2012 - 23:08 | 2538352 TheObsoleteMan
TheObsoleteMan's picture

People working into their 70's? Allready happening. We will see more of it. Of course, for every senior still in the workforce, that is a job denied to a young person.  I like the sign my mechanic has hanging up in his shop:"Don't ask for a senior discount, you have had plenty of time to raise the cash". Lots of seniors here in Florida who thought they were in solid retirement down here, are now back in the workforce. My local Home Depot is filled to the brim with them. The guy in the garden section was wearing a hat today {military type} that said "I am one of the Chosin Few", referring to him being a Korean war vet, must be in his early 80s. I thanked him for his service to the UN. He laughed and said:"Yeah, I threw that medal away a long time ago". Good for him.

Tue, 06/19/2012 - 05:26 | 2538755 mjk0259
mjk0259's picture

Yes. Really doesn't seem like a good plan. The healthy, strong, energetic people play video games all day while those that can barely function totter off to do minimum wage work partly to buy food for the video game players.

Tue, 06/19/2012 - 06:36 | 2538800 cherry picker
cherry picker's picture

This system is doomed to failure.

With advances in technology, robotics, third world labor and our massive population, the old are preventing the young from survivng.

I am prepared to make way for my children, are you?

Tue, 06/19/2012 - 10:25 | 2539327 Bob
Bob's picture

Taking a banker with you?

Mon, 06/18/2012 - 23:08 | 2538353 MrBoompi
MrBoompi's picture

Didn't we just practically hand out a few trillion over the last few years?  I guess pensioners and retirees have to go suck an egg when it comes to bailouts.

Mon, 06/18/2012 - 23:20 | 2538390 Dr. Engali
Dr. Engali's picture

But we "saved" the system.

Mon, 06/18/2012 - 23:15 | 2538373 CrimsonAvenger
CrimsonAvenger's picture

It's even worse than is being reported: as noted on page 2 of the report, Pew is rating states based on their own expected rate of return, which for most is still set at 8%. Good luck reaching that number...

Mon, 06/18/2012 - 23:24 | 2538410 kridkrid
kridkrid's picture

A mathematician, a statistician and and economist are interviewing for a job.  The interviewer asks the mathematician, "what's 2+2?", to which the mathematician replies, "four".

The interviewer asks the statistician, "what's 2+2", to which the statistician responds, "4, plus or minus 10%".

Finally the interview asks the economists, "what's 2+2?".  The economists walks across the room and shuts the door, walks over to the windows and draws the blinds, sits back down and responds, "what would you like it to be?"

Tue, 06/19/2012 - 00:17 | 2538528 toomanyfakecons...
toomanyfakeconservatives's picture

Then the interviewer peels the latex off his face and says "I am the Brenanke! You are hired!"

Tue, 06/19/2012 - 02:19 | 2538660 Lednbrass
Lednbrass's picture

Yeah, when I saw that ludicrous explanation of their methodology that they just kind of take the words of the state for it it was yet another "WTF"? moment. I would love to see what things really look like if there were actually a journalist or investigator intrepid enough to pull back that curtain.

Then again, anyone who did that would probably be found in a dark alley after having stabbbed themselves in the back until they died.


Tue, 06/19/2012 - 05:47 | 2538769 Redhotfill
Redhotfill's picture

8% !!?   I have some Arizona beach front property they should invest in to get to that number.

Mon, 06/18/2012 - 23:17 | 2538383 goodrich4bk
goodrich4bk's picture

Notice that it makes no difference whatsoever which party is in control of a state's finances.  Both Dem and Repub states have fully funded pensions and both Dem and Repub states have grossly underfunded pensions.

Mon, 06/18/2012 - 23:22 | 2538398 Dr. Engali
Dr. Engali's picture

We should probably start a couple more wars right about now before anybody notices. Purge about 150 million people out of the system and things will be okay.

Tue, 06/19/2012 - 01:40 | 2538626 Dr. Sandi
Dr. Sandi's picture

How many of these "wars" can we juggle before we start losing our balls in mid-air?

Mon, 06/18/2012 - 23:23 | 2538404 Maos Dog
Maos Dog's picture

I am not sure what this actually means:

But that pales in comparison to the ridiculous spread between retiree health care liabilities of $660 billion and assets of, drum roll, $33 billion, or a funding shortage that is $627 billion, roughly 19 times the actual assets in the system!

Now, are these shortfall funds the amount needed from the retirement age (say 50ish) to medicare age (65), or, from retirement age (50ish) to death? If it's retirement age to death, then bankrupt funds will be forced to dump these people into medicare. If this is just care costs from 50ish to 65 that's a really huge problem. We need to see more information here.

Mon, 06/18/2012 - 23:23 | 2538405 geoffb
geoffb's picture

You eated my cheezburger?

Mon, 06/18/2012 - 23:24 | 2538408 worbsid
worbsid's picture

No one has mentioned retired US military and Government workers. Are they exempt?

Mon, 06/18/2012 - 23:40 | 2538457 TheObsoleteMan
TheObsoleteMan's picture

No, but CONgress is!

Tue, 06/19/2012 - 01:41 | 2538628 Dr. Sandi
Dr. Sandi's picture

This particular piece of bad news is strictly the 50 States and their state-funded plans.

The Feds have their own special SS/Medicare turdball all greased up and ready to fly.

Tue, 06/19/2012 - 05:11 | 2538749 mjk0259
mjk0259's picture

And so do the private ones , the few that haven't dumped their plan on the feds already.

Tue, 06/19/2012 - 06:43 | 2538807 Moe Howard
Moe Howard's picture

That money is printed out of thin air on demand. No need to "invest". Hence the vastly smaller amount of the checks in the military for example. A retired LA cop makes about 5 times what retired Army NCO takes.

Mon, 06/18/2012 - 23:25 | 2538413 rosiescenario
rosiescenario's picture

Well, lets just debase the currency further until we can make ends meet....we'll fudge the COLA numbers, no problemo.

Tue, 06/19/2012 - 00:31 | 2538554 dwdollar
dwdollar's picture

Awesome, I can't wait for the debasement to accelerate. It's worked so well in the past by creating a sustainable economy.

Mon, 06/18/2012 - 23:27 | 2538422 tsuki
tsuki's picture

With the DROP law in Florida, I am surprised that 82% of pensions are funded. 

Mon, 06/18/2012 - 23:33 | 2538438 DannyTX
DannyTX's picture

Skyrocketing interest rates will fix this problem.  Years ago the actuaries probably planned on six or so perecent for the "safe" investments, which are near zero now.  If the Bernank keeps printing and interest rates go up well.........

Mon, 06/18/2012 - 23:36 | 2538447 lemonobrien
lemonobrien's picture

let them eat cake.

Mon, 06/18/2012 - 23:49 | 2538477 reader2010
reader2010's picture

Amish people were the only smart ones in America, and they opted out the Social Securtiy robbery scheme in the first place.  

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