Public pension crisis slowly unfolds

Basing my thoughts on different analyses I had read, even more than a year ago I was worried that public pensions could be in serious--I mean serious--trouble.  But then the curse of Cassandra's was that nobody would listen to her, how much ever her predictions were correct.  A lesser mortal like me would obviously fare worse than her; but then is there anything worse than what Cassandra experienced? :-)

Consider this news item about the small little state where I live:

State and local government agencies, school districts and municipalities across Oregon face a major hike in their pension costs because of last year's financial market meltdown.

How big? Contribution rates to Oregon's Public Employees Retirement System differ widely by employer. But systemwide, they will increase by an average of 8.4 percentage points starting July 1, 2011, according to a new report from the system's actuary.

It is just one tiny example of how public pensions are n serious trouble.  Multiply this story across the country and across the millions of currently retired and soon to retire public employees, and this Washington Post story becomes a statement on the obvious:

Within 15 years, public systems on average will have less half the money they need to pay pension benefits, according to an analysis by Pricewaterhouse Coopers. Other analysts say funding levels could hit that low within a decade.

After losing about $1 trillion in the markets, state and local governments are facing a devil's choice: Either slash retirement benefits or pursue high-return investments that come with high risk.

So, is anybody listening to Cassandra?