Study: NM state pension plan will run out of money in 13 years (other states much sooner)

New Mexico Watchdog .org ^ | 9/09/10 | Rob Nikolewski

[Libloather]

Study: NM state pension plan will run out of money in 13 years
By Rob Nikolewski on September 9, 2010

According to a recent study, New Mexico’s pension plan for state employees will run out of money in the year 2023, an event that would trigger a series of excruciating economic and political decisions for lawmakers that would affect not just the retirees inside the system but every New Mexico taxpayer.

Economists Joshua Rauh of the Kellogg School of Management at Northwestern University and Robert Novy-Marx of the University of Chicago Booth School of Business have developed a model of state pension fund payments across the US and identified 31 states they predict will run out of state pension fund money within the next 16 years. New Mexico falls within that range. In fact, the Rauh/Novy-Marx model predicts that by 2023, New Mexico’s state pension plan will go bust.

**SNIP**

2017 - Oklahoma, Louisiana

2018 - Illinois, New Jersey, Connecticut

2019 - Arkansas, West Virginia

2020 - Kentucky, Hawaii, Indiana

2021 - Colorado, Missouri, Mississippi, New Hampshire, Kansas

2023 - Ohio, Rhode Island, Alabama, New Mexico, Maryland, Pennsylvania, Michigan, Vermont

[Libloather]

Hold on tight.

[Tzimisce]

That’s 13 years from now.

So don’t worry. :)

[gipper81]

Electric Light Orchestra - Hold on Tight

[WHBates]

I hope no one is surprised by this.

[updatedscreenname]

These numbers are off by at least a factor of two
The money will be gone in half the time estimated
Why?

These funds will be net sellers of assets as they start selling off the values will go down.

These funds are indexed for inflation so they will be paying out more than they anticipate as the fed implements qe3,4,5,6,7,8,9,10 .......

Finally, they always underestimate the average life span, despite obamacare the average age will continue to increase.

[Pontiac]

Easy fix to put up simple cones and stop the race immediately if anyone crosses the cone zone....

Don’t worry! Obama is going to solve all of these problems.

Obama is going to nationalize all of these pension funds so he can continue to pay Social Security pensions.

Everyone will get the same pension so that it is all fare for everyone of all economic status. You know it isn’t fare that some get better pensions than others. And federal pension funds are so much safer than stock market based funds. (particularly when the Dims are in charge) /S

[alexander_busek]

Everyone will get the same pension so that it is all fare for everyone of all economic status. You know it isn’t fare that some get better pensions than others.

Fair?

Regards,

[patton]

Also, the model assumes 8% annual ROI.