Hundreds of Puerto Rico’s current and retired Catholic schoolteachers got news recently that their pensions will be eliminated due to the system’s insolvency.
The news is ominous for the country’s entire public sector. Government workers haven’t yet been stripped of their pensions, but future cuts could come as the country defaults on debt and looks for cost-saving measures.
More from the New York Times:
After 36 years teaching English at a Roman Catholic school near Puerto Rico’s capital, Norma Cardoza planned to retire with a modest pension she trusted she would get from the Archdiocese of San Juan.
Her faith was misplaced.
Archdiocese officials in recent weeks informed Cardoza and several hundred other current and retired teachers that their pensions will be eliminated because payouts exceeded contributions.
[…]
Government workers haven’t yet gotten the same bad news on pensions. But mired in a deep economic crisis, the island government has begun defaulting on billions in debt. Many financial experts here and on the U.S. mainland say underfunded public pension obligations totaling more than $41 billion will likely wind up on the chopping block.
If the money runs out, public school teachers, police officers, firefighters and thousands of other government employees could have their pensions cut, too.
Vicente Feliciano, an economist and business consultant in San Juan, predicts that various public pension systems will be unable to make full payments within two years. “When that happens, then what? Do we leave retirees on the street?” he says.
The Puerto Rico government employs about 120,000 people.
Photo by gfpeck via Flickr CC License
New Jersey’s teachers are going to be next to suffer. Their fund has about seven or eight years left before it goes to $0
http://millennialmoola.com/2016/01/18/new-jersey-teachers-pension-fund/
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