Unaffordable public-pension commitments threaten the fiscal solvency of many countries in the European Union.
Lieber lays out the case for states to scale back their pension commitments.
In addition to the abandonment or paring back of defined benefit pension commitments, obligations to fund retiree health care costs are falling by the wayside.
FORBES: A Nation on the Precipice: Our Failed Retirement System (October 12, 2007)
He cites a study by the Pew center that estimates the gap between the pension commitments and the pension funds to be one trillion dollars.
If Japan's workers cannot shoulder their burden, the country will find itself unable to honour fully its pension and health-care commitments.
Others, such as some university endowments or defined-benefit pension funds, have backstop commitments that must be honored, and they too must "capitulate" at some point.
Notably, New York's Democratic governor, Andrew Cuomo, has been waging a vigorous campaign to reduce the state's financial commitments to union pension and health plans, and Gov. Jerry Brown has been forced in the same direction in California.
Companies that once helped shoulder the retirement burden through funded pension plans are cutting back their commitments now that low investment returns, low interest rates and higher life expectancy have created frightening deficits.
The Wall Street Journal has reported that CalPERS, America's largest public-pension fund, has been selling shares to meet commitments to put more money into private-equity firms.
Without a federal guarantee, they would have had a greater incentive to reform their pension systems long ago, perhaps by paying out existing commitments and phasing out defined benefit pensions for new employees.
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Nearly half of pension funds and other large investors allocating to real estate expect to make commitments to opportunity funds in the next 12 months, Preqin said.
Some commitments (my pay check) were of a short-term nature, others (pension accrual) run over the whole length of my employment.
"We had hoped to find a way of enabling the pension scheme to continue and be restored to a sound financial position on the basis of solid financial commitments from Federal-Mogul, " he said.
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