[knarf]

I have a question;

It seems I read over and over that many pension plans are not funded.

How were these plans originally set up and what happened between then and now that they are no longer viable. ?

[patton]

The law was changed.

Localities now have to fund the pensions they promised with real money, not empty promises.

[staytrue]

“what happened between then and now that they are no longer viable. ? “

Most pension plans assumed an 8% rate of return on investments and that was the norm for most of the history the USA.

Thanks to QE to infinity, pension plans (along with other savers) the rate of return on investments is about 2-3 % in stocks, hard to say with real estate and 2-4% in bonds depending on their rating and duration.

When you plan on getting 8% and instead get 3 %, the pension plan becomes rapidly insolvent.