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News & Events

Pension pitfalls

Professor Joshua Rauh testifies before Congress on pension liabilities

2/16/2011 -
Josh Rauh
Associate Professor Joshua Rauh
Associate Professor Joshua Rauh testified before members of the U.S. House Judiciary Committee Feb. 14 on the role of public employee pensions and the risk of state bankruptcy from these underfunded liabilities.

Based on his research, Rauh predicts that without basic reform to the current pension system, many large state pension funds will run dry, even if they achieve predicted 8 percent annual returns. Rauh estimates taxpayers will bear a large share of the financial burden of the $3 trillion in unfunded legacy liabilities associated with state pension plans.

“This hidden debt will eventually force states and localities to choose among the unpalatable
options of cutting services, raising taxes, attempting to reduce benefits owed to public employees, defaulting on other obligations, or seeking a federal bailout,” Rauh testified.

Rauh is a leading scholar on pensions and has been highlighted in many major national and international media outlets, including CNN, Financial Times, The Economist and The New York Times.

To read Rauh’s complete statement, visit