I wonder if this is a sign of things to come for public pensioners around the country. Prichard Alabama quit paying out benefits to all of it’s retirees in 2009 against state law. So far, no one has forced the city to start paying benefits again but there are lawsuits. Unfortunately a number of people have died since the benefits stopped, including the retired fire marshal who was found dead at his home with no electricity or running water.
The article does talk about the fact that public pension recipients don’t have quite the same legal protections as private employees. I find myself sitting here being grateful to be at a private company that is still funding a pension for me (who knows how long it will continue though) that has the backing of the pension benefit guarantee corporation. I’m also grateful that I’m building my own nest egg to supplement any pension benefit that I’ll receive in the future. If somehow I lost my pension in retirement, I hope to have enough assets to fund my lifestyle anyway.
It’s a great example of why diversification is so important. Just like diversification in investing is critical to minimizing your risks, so too is it important to try to diversify your income streams in retirement.