Pensions as time bombs

As baby boomers in government jobs retire, their pension payouts loom as ticking time bombs for state and local budgets, reported Stateline.org in an article Sept. 23.

This year five Republican governors wanted to move state employees from traditional, guaranteed-payout pensions to 401Ks, where the state would contribute a set amount to an employee's retirement account, and that money would belong to the employee at retirement. Only Alaska Gov. Frank Murkowski succeeded, and Alaska became the first state to adopt a mandatory 401K retirement plan for all state employees hired after July 1, 2006.

Public employee unions oppose 401Ks as providing less retirement security. 401Ks can also be expensive to administer. To protect their retirement systems, states are also considering bond issues, cutting benefits, and consolidating multiple pension systems.