Pension Transition Cost Myths

PensionDialog welcomes the following article from Gary Findlay

In a recent post on The American titled “Public-Sector Pensions: The Transition Costs Myth,” Andrew Biggs noted that public pension administrators and other subject matter experts have “an obligation to provide the public with solid facts.” I could not agree more.

How Pensions Work

“We have an old saying in journalism: If you don’t understand something, it must be important.”  ~ Columnist Dave Barry on the stock market

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.

Grading the Integrity Report

When states buy goods and services, invest their employees’ pensions, hire and fire civil servants, appoint people to regulatory positions, and enforce laws, a system of policies and practices with high integrity is key to serving the interests of people.

It’s a strong and worthy premise, and the State Integrity Investigation’s goal to “inspire policy changes to promote good government practices” is worthy of endorsement.

The investigation is coherent, and as a whole substantial with its analysis of some 16,000 data points. But in the public pension category, the investigation itself didn’t make the grade.

Facts and Data That Tell the Pension Story

Two notable reports on public pensions were published this past week: the National Institute on Retirement Security (NIRS) released an updated economic impact study: “Pensionomics 2012: Measuring the Economic Impact of DB Pension Expenditures,” and the U.S. Government Accountability Office (GAO) issued “State and Local Government Pension Plans:  Economic Downturn Spurs Efforts to Address Costs and Sustainability.”

These studies offer significant data and insight on public pensions and are recommended reading in their entirety. They are also a reminder of how facts and data, not rhetoric, are needed to shape policy decisions and potential reforms. While there are several items to focus on in these reports, here are the two which have gotten the most play.