Pensionscare

Paul Krugman
NYT blog

Via Andrew Leonard, the rise in stocks since the financial crisis has made the financial position of public employee pension funds much better:

“Public pension funds are experiencing a robust recovery from the historic market downturn of 2008-2009 — reporting strong investment returns, growing assets and funding levels on track to meet obligations,” said the National Conference of Public Employee Retirement Systems.

The group, the largest trade association for public sector pensions, surveyed state and local systems representing 7.6 million people and assets exceeding $900 billion.

It found that over the last year, funds have achieved an annual investment return of 13.5 percent, nearly double the 7.7 percent rate most assume.

On average, said NCPERS, pension systems are 76.1 percent funded, meaning they can cover more than three-quarters of liabilities. Typically, pensions are considered fully funded when they surpass 80 percent.

Things aren’t perfect, by a long shot. But that crushing pension deficit, which everyone knew was going to bankrupt all state and local governments? Mainly a creation of right-wing propaganda. Are you surprised?

(More here.)