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Washington • A recent study indicated a $1 trillion gap between what states have set aside to pay their employees' pensions and what they will owe workers when they retire an amount that adds up to $8,800 for every household in the United States.
Rep. Jason Chaffetz, R-Utah, says it's time for a wake-up call on underfunded pension systems and has introduced a resolution to say that Congress won't come to the rescue of states that can't foot their own pension bills.
"It's a shot across the bow to states, saying you better step up and be self-sufficient," Chaffetz said. "You can't rely on the federal government to bail you out of your woes."
The Pew Center on the States said last year that, as of the end of 2008, states had set aside $2.35 trillion to pay employees' retirement benefits, but that the price tag of those promises was more than $3.35 trillion.
Susan Urahn, managing director of the nonprofit center, said the gap is attributed to states' inability to set aside money and deal with the growing costs of retirement benefits.
"The growing bill coming due to states could have significant consequences for taxpayers higher taxes, less money for public services and lower state bond ratings," she said. "States need to start exploring reforms."
Chaffetz's bill is only a resolution and has no power of law behind it, but he says, at some point, that may be needed.
The Republican notes that Utah leaders have been wise stewards of their retirement promises and that state residents shouldn't have to pay up for other states that have been more careless.
The Pew report said Utah has about $3 billion in unfunded liability, while California has close to $60 billion unfunded.
Also Thursday, Chaffetz added his name to a bill by Rep. Devin Nunes, R-Calif., that would require states and local governments to be more open about their pension liabilities.