April 10, 2009
MEGAN MCARDLE: The Incredible Shrinking Public Pension Funds. “This is not, it should be emphasized, exclusively a problem of public sector pensions; private firms are also underfunded. But the scale is vastly different. According to the Pension Benefit Guaranty Corporation, which regulates and insures pensions, the total deficit in private plans covering about 34 million workers was a little over 10 billion as of September 2008. That’s almost certainly multiplied quite a bit since then. But the current underfunding in public plans, which cover about 22 million workers, seems to be something north of a trillion dollars. And they’re not insured.”
UPDATE: See Megan’s update, which indicates that the private-sector problem, while still much smaller than the public-sector problem, is also much bigger than stated above.