Start with the public-transit industry, where employees often pay next to nothing toward their pensions and federal law provides them with up to six years of full pay and benefits if they're laid off, then add what have become the usual public-sector pension sustainability problems, and the result is a particularly toxic brew. That's the case in Colorado, where 1,670 Denver Regional Transit District (RTD) employees and retirees just got some very bad news about their local pension fund.
A consultant's study found that the $200 million Amalgamated Transit Union 1001 (ATU) pension fund was more than 100 percent funded in 2002, but problems became apparent the following year. By 2008 it was down to 86 percent funded, and last year, in the aftermath of the financial crisis, the pension stood at less than 50 percent. Gabriel Roeder Smith & Co., which conducted the study, says the fund is on course to be fully depleted in 2032.