U.S. pension funds are about to implode and wipe out the retirement savings of millions of state and local government employees. A flood of new reports reveals that the nation’s pension system is severely underfunded and many private equity firms have lied to their customers about their true ability to pay retirees in 2023. The stock market meltdown is set to make conditions even more precarious, and about $4.1 trillion dollars in retirement funds are on the line. And the worst part is that the catastrophic collapse of U.S. pensions means that all taxpayers are going to be financially squeezed by even higher taxes in order to make up for such massive asset losses.
As it turns out, U.S. pension funds – usually known as the gold standard for retirement security – aren’t that safe at all. New reports show that our public pension system is facing serious challenges that are threatening the retirement plans of millions of American workers. Private equity firms typically use pension money to purchase and restructure companies with the intent to sell them off later on for a profit. However, between the processes of buying and selling, these firms do not provide transparent metrics for valuing the purchased asset. This means private equity businesses can literally manufacture a number to report to their clients, the pension investors.
New pieces of evidence reported by CNN, Reuters, and The Guardian show that these firms frequently inflate valuations when seeking new investments. In December, private equity businesses reported to pension officials that their assets were worth much more than they actually are today. And data just released by Reuters proves that all of these firms were skimming billions of dollars of fees off retirees’ money. Since 2019, the public pension system lost over $1.5 trillion, facing a 21% loss in 2020 alone. At the same time, these losses have added an overwhelming amount of stress on our public pension systems, and now state and local pensions are already facing a $4.1 trillion shortfall.
Official data shows that the 100 largest public pension funds in the United States had been funded at just 78.6% of their total obligations at the close of the last quarter. Between December 2022 and February 2023, a whopping $220 billion was lost due to the tech bubble burst. And while pensioners are at risk, Wall Street’s pension fund managers are protected thanks to their heads-we-win-tails-you-lose business model, says Sirota. While reporting asset losses for investors, some of the firms managing pensioners’ money are raking in even more fees from investors and continuing to raise executives’ pay.
In other words, they are legally stealing money from U.S. workers, and no one is doing anything about it. This money transfer from the retirement accounts of hard-working Americans to the pockets of rich Wall Street fund managers is scandalous and shameful. But still, nobody seems truly worried about the consequences this may pose to millions of state and local employees that are likely to spend their retirement years closer to poverty than they ever imagined. 
In essence, the U.S. pension fund crisis is a reflection of America today, where corruption is legalized and it is the people who bear the brunt of the mistakes of our so-called leaders while they get exploited and outright robbed by a power-hungry elite that won’t be satisfied until they seize everything we have ever fought for….(read more)

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As the aging population grows, pensions are becoming a larger issue all around the world. In the United States, the Pension Crisis is at an all-time high. Many worry that the lack of funding or mismanagement of funds will cause retirees to lose their promised monthly payments. Moreover, the potential for pension benefits to significantly decrease or disappear altogether is a genuine concern that could wipe out all of your retirement savings this year.

The primary reason for the pension crisis is underfunding. Many companies and governments are unable to contribute enough money to their pension plans to support current and future retirees adequately. With fewer contributions come fewer funds, leaving the pension plan without enough money to pay out promised benefits. The lack of funding is aggravated by the increasing life expectancy of retirees, which means plan administrators must disburse payments for longer periods without additional contributions to accommodate. It is evident that the pension crisis is not a problem that can be fixed overnight. It is a long-term issue that requires comprehensive and sustainable solutions.

There are a few different scenarios that could occur in the event of a pension crisis. If the plan is underfunded but still operational, the administrators may need to reduce the benefits to offset a shortfall. In some situations, a retiree could be receiving only a fraction of what they were told they would receive. Additionally, if a plan becomes severely underfunded, it may be forced into bankruptcy. When this happens, retirees may receive little or no benefits at all.

The pension crisis has left many hard-working Americans in a difficult position. People who have spent their entire lives saving for their retirement are now at risk of losing everything. With fewer guaranteed sources of retirement income, retirees may be left to rely entirely on their savings and investments. This creates a lot of pressure on individuals to ensure they have adequate savings to sustain their lifestyle throughout their retirement years.

Ultimately, the pension crisis is a significant issue that needs to be addressed. Many people rely on pensions to provide them with financial security during their retirement. With the current state of underfunding, there is a great deal of uncertainty about the future of these retirement plans. It would be best for individuals to start taking steps to shore up their finances by maximizing their options for saving and investment, including finding sources of passive income and consulting with financial advisors.

In conclusion, the pension crisis is a serious concern for our country’s aging population and may affect all of your retirement savings this year. There is a great deal of work that needs to be done to ensure that pensions remain a viable way for retirees to maintain their lifestyle. However, in the interim, it is crucial that individuals take responsibility for their financial future and put measures in place to safeguard their savings. Time may be of the essence.

Your Retirement Savings Are at Risk of Being Wiped Out by the Pension Crisis This Year appeared first on Inflation Protection.