The New American: “Among the many problems facing the city, the most serious are those concerning its three pension plans: for fire and police, for its workers, and for those working for the Department of Water and Power (DWP). One of those plans earned 14 percent on its invested assets last year (half of what the S&P 500 Index made but twice the plan’s assumptions), and yet that plan remains a staggering $5 billion underfunded. Altogether the three retirement plans have less than 10 percent of the funds necessary to pay their benefits. Said the commission:
Los Angeles is sinking into a future in which it no longer can provide the public services to which our people’s taxes entitle them and where the promises made to public employees about a decent and secure retirement simply cannot be kept.
- The only conceivable way LA can meet its pension obligations is to reduce them
- Given that unions will not negotiate, the only conceivable way to reduce them is bankruptcy
Opinion: A recent Pew report shows the list of American cities facing pension defaults is growing.
Here are the top 10 cities with the lowest percentage of funding for pension:
- Charleston, W. Va. – $270 million – 24% funded
- Omaha, Neb.- $1.43 billion – 43% funded
- Portland, Ore. – $5.46 billion – 50% funded
- Chicago, Ill. – 24.97 billion – 52% funded
- Little Rock, Ark. – $498 million – 59% funded
- Wilmington, Del. – $364 million – 59% funded
- Boston, Mass. – $2.54 billion – 60% funded
- Atlanta, Ga. – $3.17 billion – 60 % funded
- Manchester, N.H. – $436 million – 60% funded
- New Orleans, La.$1.99 billion – 61% funded
Unfunded pension debt is a time bomb of Detroit-style proportions.