The Pension Benefit Guaranty Corporation, or PBGC, released its five key facts this week based upon data from the National Institute on Retirement Security. The first point is an admission that 85% of people are “highly anxious” about retirement. A second claim was that pensions actually accounted for $1 trillion in economic output.
Recent Census data showed that cash and security holdings rose to $2,943.5 billion from America’s 100 largest public employee pensions, according to Benefits Canada, to the highest level since 1968 when this was tracking started. Cash and security holdings had a quarter-to-quarter increase of 0.4% and a year-over-year gain of 8.4%.
Some caution exists here. If you recall, “entitlements” above do not necessarily reflect the true value. Another concern was brought up by Moody’s on September 26. Moody’s said, “More than half of the 50 largest local governments in the US ranked by debt outstanding have liabilities from pension underfunding that exceed 100% of their revenues.”
As a reminder, healthier and larger are not the same. Not by a long shot. Pension benefit obligations may remain in place even if a market sell-off comes into play. This is a topic we will be watching closely as all benefits are under close scrutiny now that Affordable Care (Obamacare) is formally launching.
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