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FRONTLINE: The Pension Gamble

Airs Tuesday, Dec. 10, 2019 at 10 p.m. on KPBS TV + Thursday, Dec. 12 at 10 p.m. on KPBS 2


Credit: Courtesy of FRONTLINE/Rain Media

Above: In "The Pension Gamble," FRONTLINE investigates the role of state governments and Wall Street in driving America’s public pensions into a $4-trillion hole. The film goes inside the volatile fight over pensions playing out in Kentucky, and examine the broader consequences for teachers, police, firefighters and other public employees everywhere. This photograph is from footage of the Kentucky State Capitol.

America’s Pension Crisis and Who’s Paying For It

America is in the midst of a pension crisis: Around half of all states haven’t saved nearly enough money to pay for the benefits they’ve promised to government workers — and the total shortage adds up to trillions of dollars.

Who is responsible — and what is at stake for the country’s teachers, police, firefighters and other public employees?

Those questions are at the heart of "The Pension Gamble," a FRONTLINE investigation.

FRONTLINE "The Pension Gamble" Preview

How state governments and Wall Street led America’s public pensions into a multi-trillion-dollar hole. Correspondent Martin Smith investigates the consequences for teachers, police, firefighters, and other public servants -- and who will be held accountable.

In the documentary, producers Marcela Gaviria and Nick Verbitsky and correspondent Martin Smith trace how state governments have withheld pension contributions to cover shortfalls and by waging risky bets on Wall Street.

“This is a story about having your retirement, that you thought was secure, go south — and it’s a story that impacts millions of Americans,” says Smith, who with Gaviria previously investigated another element of retirement in America, the 401(k) industry, in 2013’s "The Retirement Gamble."

Now, Smith goes inside the volatile fight over pensions playing out in Kentucky, a state whose once-flush pension system for its police, firefighters, teachers and other public workers is now among the worst-funded in the nation.

In Kentucky, Sewers, Pensions and Protests | The Pension Gamble | FRONTLINE

Go inside the moment the volatile fight over teachers' public pensions in Kentucky took a surprising turn in this excerpt from "The Pension Gamble."

It’s a fight with broader consequences for public employees everywhere: “What is Kentucky's problem is New Jersey's problem, is Illinois's problem, is Connecticut's problem, is California's problem,” Kentucky Governor Matt Bevin (R) tells FRONTLINE. “This is a crisis of epic proportion in the United States of America. And it's time we wake up and address it.”

RELATED: How States Have Tried To Close Their Pension Funding Gaps

As the documentary explores, starting around 2000, a series of Kentucky politicians, reluctant to raise taxes, began to divert pension savings to pay their bills and fund other projects:

“The pension was used basically as a piggy bank,” journalist John Cheves tells FRONTLINE, comparing how the state’s pension system has been administered over the past two decades to “a slow-motion car crash.”

The shortfall grew after the 2008 financial crisis — and Kentucky’s public pensions decided that in order to dig out from under, they would invest in some of Wall Street’s more exotic and risky investment vehicles, like hedge funds. Wall Street, "The Pension Gamble" reports, was more than happy to answer the call.

State pensions have been a major recruiting draw for public employees — who argue they are often underpaid in terms of salary (Kentucky’s public school teachers have seen their wages, when adjusted for inflation, increase by less than half a percentage point in the last two decades), but who are offered financial security via a guaranteed pension later on, in their retirement years.

“When you look at public servants, your teachers, your cops, your firefighters, the pension represents our promise to them, and also an acknowledgement that we might not be able to pay you what you're worth right now, but we're going to be there for you on the back-end,” Kentucky State Senator Morgan McGarvey (D) tells FRONTLINE.

Now, as Kentucky’s governor makes moves to stop shorting the pension system — including offering new hires a 401(k)-style system rather than a guaranteed pension plan, and increasing the pension contributions made by existing workers — and makes inflammatory comments about the state’s teachers, some public employees fear that promises made to them will be broken.

“Many of us teachers are working paycheck to paycheck, trying to make ends meet,” says public school teacher Christina Frederick-Trosper. “I have no savings. So, my pension is everything. Without that, I won't survive.”

Gripping and eye-opening, "The Pension Gamble" is a must-watch look at a system in crisis, state governments’ and Wall Street’s role, and why finding solutions matters.

“The bill will come due,” columnist David Sirota tells FRONTLINE. “The bill will come due.”


Episodes of FRONTLINE become available for streaming on demand at during each broadcast.


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A FRONTLINE production with Rain Media, Inc. The producers are Marcela Gaviria and Nick Verbitsky. The co-producers are Brian Funck and Sara Obeidat. The correspondent is Martin Smith. The writers are Marcela Gaviria and Martin Smith. The executive producer of FRONTLINE is Raney Aronson-Rath.


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