US faces ‘disastrous’ $3.4 tn pension funding hole–Financial Times
“The US public pension system has developed a $3.4tn funding hole that will pile pressure on cities and states to cut spending or raise taxes to avoid Detroit-style bankruptcies. According to academic research shared exclusively with FTfm, the collective funding shortfall of US public pension funds is three times larger than official figures showed, and is getting bigger….Olivia Mitchell, a professor at the Wharton School at the University of Pennsylvania, told FTfm last month that US public pension plans face ‘grave difficulties’. ‘I do believe that US cities and towns will continue to suffer, and there will be additional bankruptcies following the examples of Detroit,’ she said. Currently, states and local governments contribute 7.3 per cent of revenues to public pension plans, but this would need to increase to an average of 17.5 per cent of revenues to stop any further rises in the funding gap, the research said.”
Swiss America chairman Craig Smith strongly suggests that anyone expecting payments from government retirement programs have a viable “Plan B”; which is not dependent upon the solvency of U.S. cities, counties or states. Learn more about a precious metals retirement account.