Check Daily: www.statebudgetsolutions.org › Blog
by FRANK KEEGAN | May 4,
2012 STATE BUDGET SOLUTIONS
http://www.statebudgetsolutions.org/blog/detail/public-pension-best-practices-omit-1-thing-how-do-we-pay-benefits
Municipal
and state pensions are at least $4 trillion in the hole as the National
Conference of Public Employee Retirement Systems meets next week. Funds ended
2011 with the first year-over-year decline since 2009 after failing to make up
for Great Recession losses. And three studies released last month confirm that
without draconian cuts, current employees and retirees in some systems will not
receive full benefits.
None of
these realities are listed in the NCPERS "Best Governance Practices for Public Retirement Systems"
to be presented next week at the New
York Hilton.
Instead, the
report offers a general guideline that "seeks to drive accountability,
consistency and transparency, which enables improved performance and risk
oversight for the benefit of public pension fund members, taxpayers and other
stakeholders."
Taxpayers
are a "stakeholder" only if you consider being impaled on the stake
as holding it.
No taxpayers
are among "... more than 1,000 trustees, administrators, state and local
officials, investment, financial and union officers, pension staff and
regulators ..." attending the annual conference.
Right now
taxpayers are on that stake for more than $4 trillion we must pay on top of all
other government expenses and tax increases to receive absolutely no government
services of any kind.
No pension
reforms to date will have any significant impact on the debt, which actually
continues to grow every day.
These
trillions of dollars will put no teachers in classrooms, police on streets,
food in mouths of the hungry, homeless in shelters, pavement on streets,
garbage in trash trucks or pay for any of the essential services provided by
state and municipal workers.
This burden
will repress hiring, wages, raises and benefits for public workers for 30-50
years.
For decades,
politicians made guaranteed pension promises they did not fund, secretly
borrowing from pensions - getting rich in the process -- and leaving future
taxpayers to suffer. The future is now.
So, how do
we pay? One idea on the program at 10 a.m. Wednesday is "Retirement Security for All" proposed as a
way to drain private sector workers and businesses of cash now on false promise
to pay later.
Why can we
assume that promise is false? Just look at the record to date.
Recent
studies and data compilation by the U.S. Census Bureau, Government Accountability
Office, Federal Reserve Bank of Cleveland and Mossavar-Rahmani
Center for Business and Government at the Harvard Kennedy School detail the
continued deterioration and ultimate long-term chance of failure of public
pension systems within the overall local and state government fiscal crisis:
Underfunded Public Pensions in the United States:
The Size of the Problem, the Obstacles to
Reform and the Path Forward
Thomas J.
Healey, Harvard Kennedy School; Carl Hess Towers Watson Investment;
Kevin Nicholson, Harvard
Kennedy School; M-RCBG Faculty
Working Paper No. 2012-08
Mossavar-Rahmani Center for Business & Government
http://www.hks.harvard.edu/centers/mrcbg/publications/fwp/2012-08
State and Local Governments' Fiscal Outlook
April 2012
Update
GAO-12-523
SP
http://www.gao.gov/products/GAO-12-523SP
Public Finances: Shining
Light on a Dark Corner
Forefront, Spring 2012
The Federal
Reserve Bank of Cleveland
Public Pensions Under
Stress
John B.
Carlson, Vice President, Research Department
http://www.clevelandfed.org/Forefront/2012/winter/ff_2012_winter_08.cfm
Monitoring the Risks of State and Local
Finance
Jean Burson, Policy Advisor, Office of Policy Analysis
http://www.clevelandfed.org/Forefront/2012/winter/ff_2012_winter_09.cfm
Navigating the Legal Landscape for Public
Pension Reform: Travel at Your Own Risk
Moira
Kearney-Marks, Research Analyst, Research Department
http://www.clevelandfed.org/Forefront/2012/winter/ff_2012_winter_10.cfm
Quarterly Summary of the Finances of Selected
State and Local Government Employee Retirement System 2011 Quarter 4:
TOTAL
HOLDINGS AND INVESTMENTS OF MAJOR PUBLIC-EMPLOYEE RETIREMENT SYSTEMS HAD A
YEAR-TO-YEAR DECREASE FOR THE FIRST TIME SINCE THE THIRD QUARTER OF 2009
United States Census Bureau
http://www.census.gov/govs/qpr/
These
studies are not on the NCPERS program. So every American must read them and
weep. Then demand our governors and legislators impose real pension reforms
now.
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