Report: Public worker pensions threatened

WASHINGTON, May 11 (UPI) -- U.S. public employee pensions are threatened by skyrocketing healthcare costs and other soaring expenses, analysts warn.

Accounting gimmicks used by state and local governments to balance their pension books disguise the extent of the crisis, the Washington Post reported Sunday.

State governments have reported they are already confronting a deficit of at least $750 billion to cover the cost of retirement benefits they have promised to their employees. Analysts say the skyrocketing cost of providing retirees' healthcare benefits may soon force government officials to rethink providing retirees some promised retirement benefits.

State and local governments say their funds for retiree benefits are falling behind.

The number of severely underfunded public employee pension soared to 40 percent in 2006, the U.S. Government Accountability Office says.

"Because the fuse on this time bomb is long, politicians flinch from inflicting tax pain, given that problems will only become apparent long after these officials have departed," wrote billionaire investor Warren Buffett in a recent letter analyzing pensions for shareholders of his investment company.

"In a world where people are living longer and inflation is certain, those promises will be anything but easy to keep," he said.