Institutional Investors

US Senator tallies pension funding deficit at $4.4 trillion


Severe underfunding of state and municipal pension plans across the US could lead to a potential future downgrade of US debt and therefore contribute to increased borrowing costs for the Federal government, according a new report released by US Senator Orrin Hatch of Utah.

The Senate Finance Committee has jurisdiction over public pension issues. Hatch is currently working to draft legislation to address the current pension crisis and plans to introduce a bill this year. He found that the public pension deficit stands at $4.4 trillion, with outstanding state and local municipal debt at nearly $3 trillion.