By Anthony Randazzo

The past few weeks have seen America’s leaders wrestle with the human costs of inaction in the face of the COVID-19 pandemic. And in the next few months, state and local leaders will have to step up again and act decisively to avoid the financial effects of this pandemic from creating long-term damage to their public sector retirement systems.

Unlike the demographics most vulnerable to succumbing to the physical effects of the virus, those with the biggest cause for concern about state and local pensions aren’t America’s senior citizens and retirees. It’s today’s active public workers who should be worried. Not only are many of them on the front lines of this invisible war against coronavirus – from police officers and firefighters to the public health officers and municipal employees who are keeping the government running – but they’re doubly exposed to the disasters on the financial side of this crisis.

Consider that before 2020 started, state and local governments had reported a $1.6 trillion shortfall in the funding needed to pay promised retirement benefits to public workers. And that was fully accounting for the bull market that ran from 2009 through 2019. Measured another way, public pension funds hold just 73 cents on average for every dollar promised, minus the losses that have been piling up the past few weeks.

That means there is enough money for retired public servants to get their pension checks tomorrow, next month and next year. But the only way to meet all future promises is for states, cities and counties to increase their contributions into public pension funds while hoping for sufficient future investment returns.

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