(Bloomberg) — The bankruptcy of Detroit, which may cut retirement benefits of 30,000 current and former city workers, is causing investors to scrutinize billion-dollar shortfalls in government pensions in other parts of the country.
Estimates of public-pension shortfalls vary based on assumptions about investment earnings. The Center for Retirement Research in Newton, Mass., estimates the collective deficit of state and local pensions is from $1 trillion to more than $3 trillion, depending on investment-return assumptions.
