States Face a $1 Trillion Shortfall for Retirees

For many state governments, the chickens are coming home to roost.

There was a $1 trillion shortfall at the end of fiscal year 2008 between the $2.35 trillion states had set aside to pay for employees' retirement benefits and the $3.35 trillion cost of these obligation, according to a report released Thursday by the Pew Center on the States. The shortfall, which will have to be paid over the next 30 years, equals more than $8,800 for every U.S. household.