From the Detroit bankruptcy to a high-profile lawsuit against phone giant Verizon, pensions are in the news lately. With all the talk about pensions being frozen, or reduced, or bought out, we wanted to get kind of a “Pensions 101” perspective.
Leslie Papke is a professor of economics here at MSU, and she spoke with Current State’s Melissa Benmark. They started out with some simple pension definitions.
Fewer Americans enjoy the benefits of a pension in retirement. The recession wiped out so much invested wealth, enough of it earmarked for public workers’ pensions, that states fell much further behind in funding them. A period of transition continues, with state and local governments switching more workers to 401k style retirement plans.