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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junkyardjack's picture

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

Buckaroo Banzai's picture

No, that would require death squads.

Manthong's picture

The Progressive solution to everything is Green Energy..

of the Soylent variety.

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.

Dr. Engali's picture

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

Dasa Slooofoot's picture

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

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...

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.

Colombian Gringo's picture

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

The Big Ching-aso's picture



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


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


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."

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... 


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.

mcguire's picture

controlled opposition.. 

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.


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. 

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.  

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...

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.

Id fight Gandhi's picture

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

Troll Magnet's picture

max is not a jew you idiot. sheesh!

GMadScientist's picture lack the mental accuity to light up an easy-bake oven.

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."
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!

Michael's picture

I really like Stacy Herbert.

CompassionateFascist's picture

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

i-dog's picture

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

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."

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.

sablya's picture

Wow, there's a boost to employment

monad's picture

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

max2205's picture

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

LoneCapitalist's picture

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

Michael's picture

The Ron Paul Supporter Put = Voting for Obama;

If I can coin the name for the new strategy.

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.

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.


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.

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

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.


GMadScientist's picture

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

Mmmmm....fascist boots!

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.

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. 

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.

Blankenstein's picture

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

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.

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.

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.

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.






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.