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State Pensions - What went wrong



January 10, 2011 – Comments (2)

I have not finished reading the whole article on state pensions, it is long, but it looks to be a good summary on what happened with state pensions.

Not sure how various states are set up, but Oregon has 3 tier levels to state pensions.  The first tier is unlimited liability to taxpayers and was discontinued in 1990, tier 2 puts set funding aside and the pensions must be adjusted according to what's in the pot and I am not quite sure about tier 3, but it is another reduction in benefits.  I have not looked it up -- this is what I got from my sister-in-law who is a county commissioner in Oregon.  If I understood correctly, if pensions had been set up like the tier 2 in the first place I don't see that there would be this pension mess.

2 Comments – Post Your Own

#1) On January 10, 2011 at 12:42 PM, leohaas (29.83) wrote:

Read this in the very first paragraph of the article:

"...pumped up pensions for retirees, while cutting payments into the pension funds."

That pretty much sums it up. I am not sure who's on the hook for this, but it can only lead to increased taxes...

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#2) On January 10, 2011 at 1:12 PM, CubsBearsBulls43 (91.83) wrote:

Illinois is currently looking to raise the state income tax from 3% to 5.25% so they can float $12B in bonds, used mostly to fund state pension plans. One way or another, we all pay in the long run.

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