The NEXT 10 City Pensions That Will Run Out Of Money

chartThe red line shows the government’s estimate. The purple line is the actual cost.

The first total municipal pension default happened last week: Prichard, Ala. ran out of money stopped mailing pension checks.Hundreds of cities could be right behind. Projections by Robert Novy-Marx and Joshua Rauh [PDF] show the average city has $15,000 per household in unfunded pension liabilities. These massive liabilities are ignored by common government accounting (see chart).

Insolvency means benefit cuts or borrowing from the already-near-broke states.

Many of the 77 cities surveyed by Novy-Marx and Rauh are facing insolvency within the next decade. Other small cities like Prichard could go even sooner.

#10 Fort Worth

#9 Detroit

#8 Baltimore

#7 New York City

#6 Jacksonville

#5 St. Paul

#4 Cincinnati

#3 Boston

#2 Chicago

#1 Philadelphia

BONUS: These cities are also facing pension apocalypse

Just like cities, state pensions are running out of money.

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