Those were the recommendations from Deloitte Research, which also warned that the current pension funding issues could be aggravated by the coming wave of Baby Boomer retirees tapping into their pension accounts, unless fund managers move quickly to adopt innovative solutions.
“This is a problem that can’t simply be left for future generations to deal with; that would be both unfair and irresponsible,” co-author William Eggers, the Global Director of Deloitte’s Public Sector Research Program, said in a Deloitte news release. “However, there is an opportunity now to begin the process of identifying the problems in the system and putting in place reforms that stabilize our nation’s public pension system.”
While acknowledging there is no “silver bullet” for solving the pension crisis, “Paying for Tomorrow” identifies 10 primary factors contributing to the problem and offers solutions, the news release said.
Among the areas of greatest concern, according to the news release, are:
- Lack of prefunding requirements that mandate public retirement plans fund their pension liabilities.
- In the 1990’s, many government retirement plans opted not only to expand benefits for retirees, but also make those benefits easer to receive.
- Retirement plans greatly expanded supplemental benefits over the past 10 years.
- As plan costs have increased, employee contributions have often not proportionately kept up, and have actually fallen.
- Lucrative “unreduced” early retirement benefit provisions helped pay fatter pension amounts for longer periods of time.
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