Keeping the Promise: State Solutions for Government Pension Reform
The American Legislative Exchange Council has come out with “Keeping the Promise: State Solutions for Government Pension Reform,” a 37-page report on how states and local governments can deal with these pension issues in ways that protect taxpayers and government employees. The author is Dan Liljenquist, a former Utah state senator who has toured most of the country addressing government pension reform. He served as chairman of Utah’s Retirement Committee and drove pension reforms there that put the state’s system on good financial footing.
“The title of the report is by design,” Liljenquist said. “The reform principle we need to lead with is workers did not cause the market collapse [in 2008] and the big underfunding problems. The number one goal should be to make sure we can meet commitments.
“But these defined benefit systems are unstable because of rates of return. We cannot guarantee returns without significant deferred risk. We must treat the problem for what it is. It’s like a chemical spill. First we cap the spill and then we start cleanup.”