A new report has found that states are not experiencing a 1trillion dollar deficit for public employees retirement funds. That can be condensed to a 8,800 dollar shortfall per household in the nation. According to the report, the states ran into this problem because they by not making annual contributions and by making more benefits to pay for. States must pay the money because they are legally bound to by a union contract. The way that they will most likely come up with the money is by raising taxes for the people. Most states are coming up with rules to be applied to new employees. States are also losing the extra benefits and raising the retirement age.
I think that this is a very alarming situation. Obviously the states should have thought more about the outcomes of their actions before they did them, but that can't be changed. I think it is good that they are trying to come up with solutions to the problem, but I'm not sure the solutions will be able to last very long. If they just continue to raise the retirement age and raise taxes, eventually people will be dead before they reach retirement. Personally, as a young adult I would like to know that I will eventually be able to use the money that I will be contributing to my retirement fund one day. I also would not like to have to work for my entire life. Basically, I think it is good that the states are trying to come up with plans to fix the issue, however these plans will not work for the future. The states should also be concentrating on working on a system that will make retirement available for the future as well.
http://money.cnn.com/2010/02/18/news/economy/public_pension_gap/index.htm
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