State Forfeiture Laws Affecting Pensions

Last Friday, April 6, Maine joined 20-plus other states that have pension forfeiture laws for convicted public employees. Forfeiture is the loss of property or money because of a breach of a law.

As is the case with most pension plan components, the laws reflect a wide range of differences.

Disclosing Pensions: Public Rights, Privacy, and Financial Fraud

There is no question that it makes for good headlines to declare who is making what dollar amount in pension payments. Certainly, watchdog groups have taken advantage of doing so, or conjectured pay-out amounts to stir controversy, like Taxpayers United likes to do at press conferences.

Their position is that any funding taxpayers support should be transparent. As Dr. Tony Fargo, Indiana University Associate Professor of Journalism, told a news investigation team:  “From a public access standpoint, anything that involves the use of public money and the word secret is problematic.”

Response to a “Worse-Case” Pension Scenario with an Accurate One in Minnesota

The Minneapolis Star Tribune recently ran two editorials giving a point / counterpoint on the state’s public pension system.

On one side is the Mark Haveman, executive director of the Minnesota Taxpayers Association, challenging the state pension plans’ investment return assumptions and the plans’ overall sustainability. Mr. Haveman writes:

While public pensions lack certainty, there’s no shortage of risk. Risk to public services, when pensions need more government resources. Risk to future taxpayers, as courts have consistently ruled that benefits promised under these plans must be paid. Risk to current public employees, as higher contributions eat into take-home pay even as the long-term sustainability of today’s benefit levels becomes more doubtful.

On the other side are the board chairs of the three statewide systems: Thomas Marshall, Mary Benner, and Martha Lee Zins. Following is their response in its entirety, re-printed with permission from the authors.

Public Pension Plans: Laboratories of Democracy

The Tenth Amendment of the U.S. Constitution protects states’ prerogative to design and implement public policies that address each state’s unique demographics, political culture, and fiscal constructs.

In the area of retirement benefits for employees of state and local government, the Tenth Amendment also applies to state governments seeking to meet the unique needs and objectives of their stakeholders–the governmental bodies and the public employees within that state. 

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.