Public-worker pension funds lose big
The Daily Pulse almost skipped a beat this morning on news from the U.S. Census Bureau that the pension plans of government employees took it on the chin over the summer.
Bloomberg ran the numbers and reported that in the third quarter of 2011, 8.5 percent of the values of the 100 largest public-worker retirement plans simply evaporated. It’s the biggest drop since the U.S. economic implosion of 2008, when the same funds lost some $700 billion over the course of 12 months.
More than half of the $237 billion third-quarter loss can be chalked up to funds’ corporate stock holdings, which have been losing ground lately. Blame Wall Street or Europe if you want, but it’s taxpayers who will ultimately cover the nearly quarter-trillion-dollar shortfall.
As the same state and local governments who fund these pension plans struggle to continue providing services with less and less tax revenues, this loss will mean reduced benefits for retirees down the road, less public services in the near future — or possibly both.