Public Pensions Defend Role In Letter To Congress
June 22, 2008
To counter what it calls widespread misperceptions, a broad coalition of retirement systems, government officials and unions has sent a letter to Congress defending the financial soundness of state and local government pension systems.
Pension plans have set aside roughly $3 trillion in assets to pay for future benefits, said Jeannine Markoe Raymond, director of federal relations for the National Association of State Retirement Administrators (NASRA).
These systems are “clearly demonstrating that pre-funding a modest and stable retirement income” is still an attainable goal for the country’s workforce, Raymond said. “Our common goal is to set the record straight. The fact is, state and local government pension systems are collectively financially sound and getting retirement right for Americans.”
Keith Brainard, research director for NASRA, added that public sector pension plans have pre-funded nearly 90% of future liabilities for about 20 million Americans. About three-fourths of these costs are paid from employee contributions and investment earning, with less than one-fourth of the cost paid by the employer or taxpayer.
The coalition cited studies by the U.S. Government Accountability Office, U.S. Census Bureau and the Center for Retirement Research at Boston College that show the “vast majority” of public sector pension plans are financially sound.
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