(KTVI)-Once upon a time, employees in this country could get something called a pension. If you worked at one place long enough or worked in the same union long enough, you would get a monthly payment for life once you retired. When 401-Ks came along in the 1980's, pensions started to become scarcer. Now they're rare.
But pension plans in government jobs are now being blamed for fiscal disasters from Illinois to Detroit to California. It happened for several reasons:
- The economic crash of 2008 and a large number of retiring baby boomers mean some pension plans cost more than governments can afford
- Lots of governments raided pension plan money in the past to pay for other things and now can't afford the pensions
- Pension plans that include medical care for retirees are being quickly drained by escalating medical costs.
So how big is this crisis for governments across the country? Charles Jaco talks it over with Dr. Michael Alderson, the head of the finance department at Saint Louis University, who has written about and studied pension systems since the 1980's.