“Many cities and states can no longer afford the unsustainable retirement promises made to millions of public workers over many years,” writes The Wall Street Journal’s Sarah Krouse. “By one estimate they are short $5 trillion, an amount that is roughly equal to the output of the world’s third-largest economy.”
The takeaway: “Certain pension funds face the prospect of insolvency unless governments increase taxes, divert funds or persuade workers to relinquish money they are owed. It is increasingly likely that retirees, as well as new workers, will be forced to take deeper benefit cuts,” Krouse says.
