Family Life

04.27.09 | Terry Diener

Pennsylvania's day of reckoning over its multibillion-dollar pension promises to government employees and teachers has been pushed back for the better part of the past decade. But long-expected increases in costs are scheduled to kick in three years from now, and meeting those retirement obligations could cripple state government and school boards.

Depending on what happens in the stock market, taxpayers could soon find themselves stuck paying more than $5 billion in additional annual payments. The state's two large public sector pension plans said last month that the $821 million a year they now get in "employer contributions" - most of it from taxpayers - will need to grow to $5.7 billion a year by 2012. The assumptions underlying those numbers could be overly optimistic.