New York City in fact. From the Foundation for Economic Education:
New York City’s Pension Debt Is Driving It to Bankruptcy
New York City is in dire straits. You might not know it, but the city is staring bankruptcy in the face. Stakeholders are scrambling for answers to this issue, but there’s been little talk about one of the main causes of the city’s growing debt: public employee pensions. As of today, nearly 75 percent of the city’s $197.8 billion deficit is due to pension and other retirement liabilities.
What will happen if the city goes bankrupt?
Pension and Public Service
Currently, NYC offers five different pension plans to its municipal employees, from teachers to members of the school board. These pensions serve as a source of retirement income to former city employees and are defined benefit plans, meaning that benefits are guaranteed by the employer. The employer is making investment decisions and managing investments for the plan so that when employees retire, they receive the promised benefit. For that to happen, all the actuarial assumptions need to be correct in their predictions about investment returns, demographic trends, and other variables.
Much more at the site. A good analysis. The unions seriously misjudged the rate of return on the principal. Asking Uncle Sam for a bail-out in 3... 2... 1...
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