State Pensions’ $865 Billion Loss Affects New Workers

A combination of stock market losses, a surge in baby boomer retirements and retirees increased longevity are about to blow up pension plans. Many retirees are going to receive letters alerting them that their retirement checks will be cut as much as 50% over the next two years. One of more distressing situations arising from the financial crisis. Couple that with the coming inflation problem and we may see a vast number of older folks impoverished, truly sad indeed.=Lou

State Pensions’ $865 Billion Loss Affects New Workers

By Adam L. Cataldo

Jan. 13 (Bloomberg) -- State governments from Rhode Island to California have run up estimated pension-fund losses of $865.1 billion, forcing some to cut benefits for new hires.

Assets for 109 state funds declined 37 percent to $1.46 trillion over the 14 months ended Dec. 16, according to the Center for Retirement Research at Boston College. The Standard & Poor’s 500 Index of stocks fell 41 percent in the period.

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