Assuming future state contributions fund the full present value of new benefits, many US state systems will run out of money in 10-20 years. This paper argues the expected shortfalls raise the possibility that the federal government will be faced with a decision whether to bail out states driven to insolvency by their pension programs.
To access the paper, written by Joshua Rauh, department of finance, Kellogg School of Management, Northwestern University, click below.
Are State Public Pensions Sustainable?
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