The Mystique of the 80% Funding Threshold

Experts say, “A public pension fund is deemed healthy if it is 80 percent funded.”

Connecticut Governor Dannell Malloy has made it his goal: “What I actually aspire to is getting to an 80 percent funding as rapidly as we can and the fact that we can do that and save the taxpayers $6 billion is pretty important.”

But the questions are who are the “experts” and why 80 percent?

Changing the Dialog in 2012

Blame it on e-mail, texting, Twitter. Say it is because we are too rushed, overloaded with information, doing more and more with less and less. Or an over-reliance on cut and paste. Whatever the cause – if there is just one – we’ve become a nation of lazy writers and speakers, readers and listeners. Which means we repeat the same phrases we read/heard somewhere else and do not even stop to consider whether or not they are accurate.

Back of the Envelope Reporting

Hang around economists, actuaries, or others who are neither but want to speak like they are, and you inevitably hear the phrase “back of the envelope” meaning quickly done, not perfect, but reasonable. Wikipedia (a rather back-of-the-envelope source) states: “The defining characteristic of back-of-the-envelope calculations is the use of simplified assumptions” (emphasis is mine).

Differing Opinions on Whether State Pension Problems are a “Big Deal” – but Why Refuse to Engage?

On September 2, 2011, Josh Rauh of Northwestern University posted a blog entitled “Are State Pension Problems a ‘Big Deal’?” He states this question was asked by a colleague given that pension contributions account for 3.8% of state and local spending.

Pensions Aren’t the Problem: How Not to Balance State Budgets

Guest post by Eli Lehrer, vice president of the Heartland Institute

In March 2010, the notoriously divided Illinois legislature passed a major reform in the state’s pension plan that created a two-tier system offering decidedly less generous benefits to new hires. In response, Republicans and Democrats alike patted themselves on the back. “This bill is not window dressing,” declared senate minority leader Christine Radogno (R) in an interview with the Chicago Sun-Times. House speaker Michael Madigan (D), long the state’s major power-broker, agreed.

For all the self-congratulation, the victory proved hollow.