Warren Buffett Calls State's Public Pension Debt a 'Disaster'

Warren Buffett
Warren Buffett / Getty Images

Legendary investor Warren Buffett said he wouldn’t "walk into liabilities" by expanding in states like Illinois or New Jersey, which carry billions of dollars in pension debt.

In an interview with CNBC, the Oracle of Omaha was asked about how he sees unfunded pension liabilities affecting the economy in the next ten years.

"In the public sector, you know, it's a disaster," he said. "...if I were relocating into some state that had a huge unfunded pension plan, I'm walking into liabilities."

He told CNBC anchor Becky Quick that kind of debt creates uncertainty about how politicians would go about paying for it.

"I'll be here for the life of the pension plan and they will come after corporations, they'll come after individuals. They're going to have to raise a lot of money," he said.

Buffett didn't directly refer to Illinois or New Jersey, saying only "praise by name, criticize by category."

Conservative estimates put Illinois’ unfunded pension liability at $135 billion, more than nearly any other state in the country. That’s not including the future cost of retiree healthcare, estimated to cost more than $50 billion.

Buffett’s investment firm, Berkshire Hathaway, owned a small portion of Chicago-based Archer Daniels Midland but sold that stake off in 2013.

Berkshire Hathaway does own other companies in Illinois, notably the Marmon Group, a holdings company based in Chicago that was founded by Gov. J.B. Pritzker’s uncles.

Warren Buffett's son, Howard Warren, worked for ADM in the 1990s and was later appointed sheriff of Macon County. His term in that office ended last November.

Published under: Warren Buffett