How the Public Sector Pension Crisis Will Impact You

Why most state and municipal pension plans are underfunded and why that could lead to higher taxes and reduced government services. Why participants in state government retirement systems have greater protection against benefit cuts than participants in municipal retirement systems.

Topics covered include:

How defined benefit plans work.Why there is more subjectivity regarding valuing a pension plan's liabilities compared with its assets.What does it mean for a pension plan to be underfunded, and why are so many public sector pension plans in that situation.Under what circumstances can a pension plan cut benefits to beneficiaries.Why underfunded pension plans will most likely lead to higher taxes and reduced government services.

Thanks to WIX and Peloton for sponsoring the episode.