US public pensions face a shortfall of $2,500bn that will force state and local governments to sell assets and make deep cuts to services, according to the former chairman of New Jersey’s pension fund.
The severe US economic recession has cast a spotlight on years of fiscal mismanagement, including chronic underfunding of retirement promises.
But in addition to slashing services and raising taxes, there are other remedies:
“I don’t assume that you will have that level of defaults just because there are various remedies, including asset sales, that you can engage before you have to default,” he said. “States have an interest in their major municipalities not defaulting.”
Anybody wanna buy a 50% interest in a money-losing golf course? How 'bout a contaminated former flower growing site?
The Encinitas City Council, after boosting pensions in 2005 to allow employees to retire at 55 and get paid full-time salaries for life, still has not put pension reform on the agenda.