U.S. Chamber Looks for Solutions to Looming State Pension Crisis

WASHINGTON, D.C.—The U.S. Chamber of Commerce’s National Chamber Foundation (NCF) and the U.S. Chamber’s Labor, Immigration & Employee Benefits division co-sponsored an event today underscoring the economic crisis emerging from state and local pension plans which find themselves facing growing budgetary pressures due to increased benefits and past promises that they can no longer afford.

“There has been considerable attention given to the issue of underfunding in state and local benefit programs,” said Randel Johnson, senior vice president of Labor, Immigration & Employee Benefits. “While the severity of the crisis varies from state to state, there is agreement that, as a whole, state and local benefit programs are severely underfunded.”

According to a February 2010 report released by the Pew Center on the States, as of the end of fiscal year 2008, between the $2.35 trillion states have set aside to pay for employees’ retirement and health benefits and the $3.35 trillion price tag for promises made, there was a $1 trillion budget gap.

Among the other participants at today’s event were David M. Walker, president and CEO of the Peter G. Peterson Foundation, Margaret Spellings, executive vice president of NCF, and Aliya Wong, executive director of Retirement Policy at the Chamber. Panelists discussed where many states currently stand financially; the risks these massive deficits pose to businesses and taxpayers; and possible solutions state pension funds may turn to, including lessons learned from private sector pension systems.

The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.

# # #