Several Major Cities Top University Study of Most-Abominable Pensions
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According to a report out of the Kellogg School of Business at Northwestern University, Philadelphia, Boston, and Chicago face the worst solvency time horizon for unfunded pension liabilities. Philadelphia will only be able to pay benefits now through 2015, Boston and Chicago have enough to fulfill obligations through 2019.
Additionally, Cincinnati, Jacksonville, and St. Paul will only be able to pay their benefits until 2020.
The sample data comes from all non-state municipal entities with more than $1 billion in pension assets, covering 2.04 million local public employees and retirees.
Obligations can be steep for the cities. As an example, if Chicago shut down all other spending in the city, they would still need eight years of dedicated tax revenues to cover pension promises.
Spreading the burden through produces an average of $14,165 in obligations for each household in the 50 cities and counties that were studied. In New York City, San Francisco, and Boston, the total is more than $30,000 per household and in Chicago, the total is more than $40,000 per household.
Residents in these regions could see increased local government taxes, and might also be called upon for the $3 trillion in unfunded liabilities at the state level.
That’s correct. The authors of this study conducted another in 2009 that showed $3 trillion in unfunded liabilities that taxpayers will shoulder from state retirement systems.
The study was co-authored by Joshua Rauh of the Kellogg School and Robert Novy-Marx of the University of Rochester.
Additionally, Cincinnati, Jacksonville, and St. Paul will only be able to pay their benefits until 2020.
The sample data comes from all non-state municipal entities with more than $1 billion in pension assets, covering 2.04 million local public employees and retirees.
Obligations can be steep for the cities. As an example, if Chicago shut down all other spending in the city, they would still need eight years of dedicated tax revenues to cover pension promises.
Spreading the burden through produces an average of $14,165 in obligations for each household in the 50 cities and counties that were studied. In New York City, San Francisco, and Boston, the total is more than $30,000 per household and in Chicago, the total is more than $40,000 per household.
Residents in these regions could see increased local government taxes, and might also be called upon for the $3 trillion in unfunded liabilities at the state level.
That’s correct. The authors of this study conducted another in 2009 that showed $3 trillion in unfunded liabilities that taxpayers will shoulder from state retirement systems.
The study was co-authored by Joshua Rauh of the Kellogg School and Robert Novy-Marx of the University of Rochester.
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