Business
(2009-04-06)
CHICAGO, IL
(wsiu) -
Huge investment losses by public pension funds are pressuring state lawmakers nationwide to spend more taxpayer money to shore up their programs and boost the retirement age for new government workers.Illinois is among a half dozen states considering defined contribution pension plans, like a 401(k), for public employees rather than enrolling them in a traditional defined benefit pension that pays a guaranteed annuity to retirees.
States' pensions have collectively lost at least $1 trillion as financial markets swooned over the past year. Public pensions cover about 14 million state and local employees.
Because pensions involve long-term obligations and investments, there's no immediate risk states will be unable to pay benefits. But replenishing pensions could squeeze states for years, forcing lawmakers to juggle spending priorities.
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