A $1 Trillion gap–according to a new report by the Pew Center on the States: Trillion Dollar State Pension Gap.
The gap is between the $3.35 trillion in pension, health care and other retirement benefits states have promised their current and retired workers as of fiscal year 2008 and the $2.35 trillion they had on hand (in 2008) to pay for them.
In fact the actual gap is much worse. Because the analysis did not encompass the final six months of calendar year 2008, nor 2009 — it does not include the market downturn that devastated many funds’ investment portfolios. “The funding gap will likely increase when the more than 25 percent loss states took in calendar year 2008 is factored in,” the report said.
Do the math: To fill a $1 Trillion pension fund gap would require about $10,000 from EVERY household in the US.
That which cannot be paid, will not be paid.