Survey Shows Majority Of Pensioners Have No Idea Their Pensions Are Underfunded

Over the past several years, we've written a countless number of posts on the precarious financial situation of numerous state and local public pensions around the country all while frustratingly wondering how the massive $3-$6 trillion dollar ticking time bomb doesn't seem to be that much of a concern to frothy asset markets.  As it turns out, precisely no one (our readers excluded, of course), including the workers who are active participants in insolvent public pension ponzi schemes, have any idea just how underfunded they really are.

According to a staggering new survey conducted by Spectrem Group, 6 out of 10 CalPERS retirees and 8 out of 10 NYC retirees are apparently under the illusion that their pensions are fully funded...

NYC Funds pension members were the most likely to indicate that their pension is fully funded (80%) while the CalPERS members were the least likely to indicate that their pension was fully funded (63%). Sixty-six percent of National members indicated that they believe their pension fund is fully funded. In reality, none of these pensions are fully funded. Based upon annual reports, CalPERS is funded at 68.1% and NYC Funds is funded at 62%.


...and that's a survey of the people who are actually owed money by these ponzi schemes...which means that the general population working in the private sector has no clue whatsoever that underfunded pensions could literally result in a complete, global economic crisis at some point over the next 10-20 years.

Of course, as this one simple map illustrates, reality is somewhat different than the hopes and dreams of America's public pensioners.  In fact, when using realistic discount rates, there is only 1 state pension system in the entire country, Wisconsin, that is more than 50% funded....all the others are trillions of dollars short.

Meanwhile, some 85% of pensioners are also convinced that their pension boards are minting cash in the current Yellen-induced equity bubble...


...but, as we've noted, that too is simply not the case as CalPERS managed to return about 3% over 2015 and 2016 combined as their funding ratio continued to sink.


Meanwhile, for those who have managed to at least educate themselves enough to know that their pension is underfunded, roughly two-thirds say they're not "very concerned" and figure it will all just work itself out naturally...maybe via the pension fairy?

For National pension members, their level of concern is 70% while CalPERS and NYC Funds members both expressed a higher average level of concern (76%). Previously, many pension members identified themselves as moderately well-informed about the actual investment returns and target investment returns of their fund. Upon further questioning, however, many pensioners’ beliefs about fund performance were more optimistic than the actual performance of the fund. Similarly, when pension members were questioned regarding the funding levels of their pension funds, the largest numbers of pensioners indicated that their pension fund was fully funded, despite the fact that none of the funds are fully funded. For those who understood that their pension was underfunded, they expressed concern regarding their own ability to collect their pension in the future.


Luckily, the responses weren't all least 80-89% of respondents said their pension boards should focus on making money and not advancing social or political causes...


...perhaps they're more familiar with ERISA law than Governor Cuomo? (see: Another Liberal Governor Demands His State's Pension Abandon Fiduciary Duties, Sell Fossil-Fuel Investments)


Theosebes Goodfellow toady Fri, 01/05/2018 - 20:39 Permalink

~" According to a staggering new survey conducted by Spectrem Group, 6 out of 10 CalPERS retirees and 8 out of 10 NYC retirees are apparently under the illusion that their pensions are fully funded..."~

That's just the joke's setup. The punchline is...

They're all denominated in US Dollars!


Same for most IRAs...

Same for most 401Ks...

Same for most annuities...

But it gets better!!!!

Remember MF Global? All of those supposedly "segregated accounts"?


Sorry, I know it's not nice to laugh at the calamity of others...

but sheep will be shorn.

Free Jon Corzine!

In reply to by toady

Theosebes Goodfellow Ghost who Walks Sat, 01/06/2018 - 06:30 Permalink

~" Are you inferring that it doesn't matter if the Pension Funds are fully funded, as the Dollar will go the way of the Venezuelan Bolivar?"~

Oh no, Ghost, I'm not inferring, I'm saying it outright. Do the math. At some point the US will have to "square the books". There's the known $20T of debt, the "unfunded liabilities" of another say $65T, (probably more), and only 8500T or so of gold in the US depositories, (Ft. Knox, West Point, NYC). The purchasing power of the US Dollar is what gets whacked when push comes to shove. To paraphrase a very crappy American credit card commercial...

What's in your safe?

In reply to by Ghost who Walks

nuerocaster Theosebes Goodfellow Sat, 01/06/2018 - 10:55 Permalink

1. Fed

2. World Reserve Currency

3. Most powerful lawyers guild in the world

4. Largest military by far

5. Supine loboticized population more likely to protest global warming than anything else

6. Corporate tax rate reduced to 21%

Now imagine you're a kleptocrat or a gangster or merely a tax evader, where are you going to stash your loot? Brazil? Turkey? Argentina? S. Africa? Where can you do some high living and still likely have anonymity?

Paul and Roberts are right about Afghanistan, it's insane,but their cost/benefit analysis of imperialism isn't close to reality.

Libertarians have the same problem. Yes the pendulum has swung way, way, way over to concentration of power and wealth. The West has become virtually sovietized.

But you have these conservatives delusional about the current state of affairs and libertarians delusional about what's achievable. The anti-federalists and confederacy lost.

Forget constitutional republic and guaranteed civil liberties. You need someone like Trump who will knife fight in gutters, you need to go out and fight for control of the streets if you want a seat at the table.

In reply to by Theosebes Goodfellow

wdg ted41776 Sat, 01/06/2018 - 09:18 Permalink

It is beyond my imagination what the landscape will look like when this all comes crashing down. The future will be interesting to say the least as we are all faced with basic survival. Parasitical governments will simply disappear as local communities and the law of the jungle takes over. Make sure you are not caught in major cities and have a place in the country to grow food, heat your home and defend yourself when civil war breaks out.

In reply to by ted41776

SoDamnMad Freddie Sat, 01/06/2018 - 05:47 Permalink

Just add more state workers (bust) or tax the people more (bust). They need to jump into the courts now and take that cream off the top of those who massaged their final years to get outlandish retirements and also look at the California University salaries and the pensions that the department heads, deans, chairs etcetera scalp.

In reply to by Freddie

Sonny Brakes Fri, 01/05/2018 - 18:56 Permalink

Cognitive dissonance.

Imagine believing that you can spend 20 to 30 years working somewhere, retiring and believing you can spend another 20 to 40 years being taken care of financially in today's fragile economic climate. I can't speak for anyone but myself, but I'd rather go Galt then have the state confiscate my labour. 

Theosebes Goodfellow Sonny Brakes Fri, 01/05/2018 - 20:48 Permalink

~"Imagine believing that you can spend 20 to 30 years working somewhere, retiring and believing you can spend another 20 to 40 years being taken care of financially in today's fragile economic climate."~

Most of these pensions are for GOVERNMENT EMPLOYEES. These people are the dyed-in-the-wool, koolaid-drinking believers in bigger government. My empathy level for these folks is severely constricted. I always viewed those who would work for the government THEIR WHOLE LIVES as either unable or unwilling to compete for work in the marketplace. They are leeches, or cattle, feeding at the troughs of the taxpayer's exertions. I hold them in the same disdain I reserve for lifelong politicians. Through feeders the lot of them!


In reply to by Sonny Brakes

TheAnswerIs42 Theosebes Goodfellow Fri, 01/05/2018 - 22:45 Permalink

Yeah, when I was just out of school I got a state job  as an engineer.

It was boring but the bennies were great. After a few years, I took an advancement test and scored #2 out of 200.

Got promoted. Then the economy hit the shitter, the state budget went south and they laid off people based on seniority.

Because of my test score and new position, that included me.

Even then I figured out that laying off your best and brightest was mebbe not a great idea.

But there was a union.

It turned out that getting laid off from the state was the best thing that ever happened to me.

Instead of becoming a mature cucumber, I actually did something useful with my life.

Started a business and never looked back. 40 years later, it is still quite satisfying and challenging.


In reply to by Theosebes Goodfellow

3-fingered_chemist Fri, 01/05/2018 - 18:58 Permalink

Hence why DOW will go to 40k maybe higher. It's the only way the pensions can keep treading water with large equity gains. 

The problem though is that for most pension funds even if they do well on investments, the annual draw downs are slowly bleeding the funds to the point there will be 0 dollars in them. The pension funds need FRESH money more than they need investment gains. Same story with SS, you've almost got 1 person taking benefits that is putting in. End result = cat food and ramen noodles.

MusicIsYou Fri, 01/05/2018 - 18:59 Permalink

In other news: diners were horrified when their fried fish came back to life on the table. And in other news: plants can feel it when they're harvested.

SantaClaws Fri, 01/05/2018 - 19:02 Permalink

Think these public plans are in trouble?  The private employer plans are worse.…

Perhaps even worse than the private plans are the religious institution plans, of which some or all may be exempt from ERISA.  Some years ago I read that the Christian Science Society raided its employee pension plans when it got into trouble following some bad investments.  And several months ago, the Episcopal Diocese of Rhode Island was shown to have knowingly underfunded a hospital worker pension plan for years, which plan has apparently all but collapsed.…

HRH of Aquitaine 2.0 Fri, 01/05/2018 - 19:14 Permalink

Financial literacy is at an all-time low in the US.  Most people don't have a fucking clue.  I mentioned a poster on a Utube channel I joined recently.  Young Asian guy runs the channel and he gives good, practical, financial advice (for free).  Older gal stumbled onto it and thought she was going to get good advice on how to live well in a condo with an ailing husband, no savings, and limited income after retiring.

I mean, what do you say to that?  I didn't ask if her husband had life insurance.  I didn't ask if they had some type of burial insurance, either.  I didn't ask about an emergency fund, either.  Why?  Woman said they still had a mortgage (on a fucking condo) and she was still making car payments.  At 62 (I estimated her age since that is the minimum retirement age in the US) years old?  You can't just pay cash for the fucking car?  You couldn't downsize and pay cash for the fucking condo?

What did I advise her?  Sell the fucking car.  (Other people said the same thing).  And then I said, gasp, there is always Section 8 / senior housing and a bus pass.  You can't have any assets to live in senior housing / HUD / Section 8 but it's better than being homeless.  And I bet that woman and her husband are not the minority, they are the majority and those numbers increase every single day.


Coming from fight club I did restrain myself. I didn't mention eating dog or cat food or living on beans and rice, either. Perfect couple for the reverse mortgage scam. Or even better, I saw a commercial yesterday, a reverse mortgage HELOC.

Conscious Reviver SmilinJoeFizzion Sat, 01/06/2018 - 00:35 Permalink

Doing some volunteer work some years ago, I had to interact with a CA Community College retired admin. guy who's convo centered around his late promotion to get him his $85K/Yr pension. Then he got hired back to get his salary plus pension. He bragged how he never got anything done and his biggest accomplishment was not getting fired and surviving eight bosses. He had his wife, who he met in the system, following the same path. So between them, these two bozos were pulling down $2-300K/Yr for life, from the public, for essentially nothing.  

In reply to by SmilinJoeFizzion

Promethus Fri, 01/05/2018 - 19:36 Permalink

Don't worry ZH government employee haters. States like Florida have already baked the big BOHICA into the pension cake.A worker retiring under the new rules will receive less than half the benefits of one retiring under the old.

That way we can save the government money for the next big bank bailout and a brand new war. I love that new war smell.