Public pensions are mixing risky investments
More than 20 million Americans are covered by state and local government pensions. Unlike the 401(k) plans found in the private sector, these “defined benefit” plans promise to pay retirees a set amount of money every month for the rest of their lives.
For most public workers, these generous programs are a cornerstone of their financial security; for many, they’re one of the main attractions of government jobs. Yet the plans, by their own reckoning, are underfunded to the tune of $1.6 trillion.