When an Alabama town’s pension fund ran out, it simply stopped sending money to its retirees—a decision that’s never been made before, pension experts believe. That left retired public workers struggling: Some returned to work, one filed for bankruptcy, and one died with no electricity or running water at home. The New York Times calls the case a warning to other cities and states with tight pension funds.
Such concerns are widespread; New Jersey, Illinois, and Colorado, to name a few, are all tightening their belts, along with cities such as Philadelphia. Bankruptcy lawyers, local officials, and labor leaders are now monitoring the situation in Prichard, which was once a thriving town. Its woes are “the future,” warns San Diego's former city attorney. “We’re all on the same conveyor belt.”
(Read more Alabama stories.)