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Re: Corporate Pension Fund shortfalls weigh on recovery - Eric Janszen
Federal retirement plans almost as costly as Social Security
By Dennis Cauchon, USA TODAY
Federal retirement plans almost as costly as Social Security
By Dennis Cauchon, USA TODAY
The federal government hasn't set aside money or created a revenue source similar to Social Security's payroll tax to help pay for the benefits, so the retirement costs must be paid every year through taxes and borrowing.
The government paid a record $268 billion in pension and health benefits last year to 10 million former civil servants, military personnel and their dependents, about $100 billion more than was paid a decade earlier after adjusting for inflation. And $7 billion more was deposited into tax-deferred accounts of current workers.
In addition, the federal government last year made more than a half-trillion dollars in future commitments, valued in 2010 dollars that will cost far more to pay in coming decades. Added last year:
•$107 billion in retirement benefits accumulated by current workers.
$106 billion in new benefits granted to veterans.
•More than $300 billion in the snowballing expense of previous retirement promises that have no source of funding.
In all, the government committed more money to the 10 million former public servants last year than the $690 billion it paid to 54 million Social Security beneficiaries.
The retirement programs now have a $5.7 trillion unfunded liability, compared with a $6.5 trillion shortfall for Social Security. An unfunded liability is the difference between a program's projected costs and its projected revenues, both valued in today's dollars.
USA TODAY's analysis is the first comprehensive calculation of how much the government spends on benefits for retired federal workers. The $275 billion paid last year — roughly two-thirds cash, one-third medical benefits — are spread over dozens of overlapping programs in many departments and agencies.
The government paid a record $268 billion in pension and health benefits last year to 10 million former civil servants, military personnel and their dependents, about $100 billion more than was paid a decade earlier after adjusting for inflation. And $7 billion more was deposited into tax-deferred accounts of current workers.
In addition, the federal government last year made more than a half-trillion dollars in future commitments, valued in 2010 dollars that will cost far more to pay in coming decades. Added last year:
•$107 billion in retirement benefits accumulated by current workers.
$106 billion in new benefits granted to veterans.
•More than $300 billion in the snowballing expense of previous retirement promises that have no source of funding.
In all, the government committed more money to the 10 million former public servants last year than the $690 billion it paid to 54 million Social Security beneficiaries.
The retirement programs now have a $5.7 trillion unfunded liability, compared with a $6.5 trillion shortfall for Social Security. An unfunded liability is the difference between a program's projected costs and its projected revenues, both valued in today's dollars.
USA TODAY's analysis is the first comprehensive calculation of how much the government spends on benefits for retired federal workers. The $275 billion paid last year — roughly two-thirds cash, one-third medical benefits — are spread over dozens of overlapping programs in many departments and agencies.
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