The Commonwealth of Pennsylvania's two main pension plans, SERS and PSERS are staring at a daunting liability. According to actuarial methods the unfunded liability for these two plans is $39.5 billion. I calculate, using a risk-free discount rate, that it is $116 billion. Lawmakers know they have a serious problem on their hands. 

The Urban Institute has put together fascinating interactive charts on the basis of the grades it gave to American cities on the degree of equity for African-Americans and Latinos. The general findings of the Institute's study was that blacks and Latinos are likely to hold better jobs, live in nicer neighborhoods, and send their children to better schools in the South and West than in the Northeast and Midwest. What the report calls the "opportunity gap" is between blacks and whites is narrowest in Albuquerque (NM), El Paso (TX), and Lakeland (FL) and widest in Milwaukee (WI), Chicago (IL) and Buffalo (NY). The rankings reflect residential segregation, income disparities between groups, school test scores, employment rates, and homeownership. Worth a look.

George Will's column today draws on some new research by Paul Peterson and Daniel Nadler at Harvard. They find that the higher the percentage of public employee who are unionized, the greater risk investors see of the state defaulting on its bonds, resulting in higher interest rates.

The New York Times Julie Creswell reports on the strategy undertaken by some public sector plans to embrace more investment risk in the wake of the market crash of 2008. The results are not what plan managers were hoping for.

Dan DiSalvo's new report for the Manhattan Institute points to the enormous resources that government unions garner through dues to spend on influencing policy in lobbying and political advertising. Increasingly, union leaders find themselves being called by the media to justify this enormous spending, and their justifications can be wildly creative, according to Mike Antonucci at the blog Intercepts.