# There’s a Way to Fix the $4.6 Trillion U.S. Public Pensions Mess — Canada Shows Us How

1 Opinion November 22, 2020 MarketWatch ![Ingo Walter ](/sites/default/files/styles/246w/public/assets/images/iwalter-article.jpg?itok=Cq48xAvr) By Ingo Walter and Clive Lipshitz >

In Ernest Hemingway’s “The Sun Also Rises,” Mike is asked how he went bankrupt. His reply: “Two ways. Gradually, then suddenly.” He might as well be describing the prognosis for many of the nation’s 5,300 public pension funds, which hold $4.4 trillion in assets against what the Federal Reserve estimates to be $9 trillion in liabilities.

Most U.S. public pensions plans were in surplus in 2000. Today, based on their own accounting – which differs from that of the Fed – they hold less than 75 cents on every dollar they owe to their 33 million plan members. Funding gaps are now affecting municipal bond ratings, and COVID-19 has introduced new stresses to public finance.

Pension reform is needed, yet no one seems to know what to do. And few want to rock the boat.

Read the full [*MarketWatch* article](https://www.marketwatch.com/story/theres-a-way-to-fix-the-4-6-trillion-u-s-public-pensions-mess-canada-shows-us-how-11605912709).

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*Ingo Walter is a Professor of Finance Emeritus at New York University Stern School of Business.*## More from Ingo Walter

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