Tag: Tristan Fitzpatrick

THIS WEEK IN PENSIONS: AUGUST 27, 2021

Mary Pat Campbell
This Week in Pensions: August 27, 2021

Excerpt:

Best and Worst States for Pensions by Joel Anderson. In this article for Yahoo! Finance, Anderson ranks the “best” and “worst” states for public pensions based on their unfunded liabilities. As we’ve written before, judging states based on their funded status is highly misleading. An unfunded liability is merely the difference between “the total amount of benefits owed to ALL current employees & retirees and the value of the financial assets the pension plan manages.” A pension system never needs all of that money at once because a fund has a long time to earn investment returns from what employers and employees contribute. Furthermore, each pension plan provides a Comprehensive Annual Financial Report (CAFR) that shows the vast majority of retired public employees stay in the state they worked in during their career, which means they are reinvesting their pension benefits into their local economies. Stories like this are best viewed skeptically compared with the facts about public pensions. 

Author(s): Tristan Fitzpatrick

Publication Date: 27 August 2021

Publication Site: National Public Pension Coalition

WHY TRUTH IN ACCOUNTING’S RECENT CLAIMS ABOUT PENSIONS ARE INACCURATE

Mary Pat Campbell
Why Truth in Accounting’s Recent Claims About Pensions Are Inaccurate

Excerpt:

As routine as the changing of the seasons, every year, Truth in Accounting (TIA) produces a new report which declares that taxpayers across the country will somehow have to foot a huge tax bill immediately to pay for their state’s unfunded pension liabilities. However, a recent working paper from the Brookings Institution shows this is not a truthful depiction of how public pension funding works. 

TIA often argues that taxpayers are responsible for paying their city and/or state’s unfunded liabilities in a few ways. First, if a pension isn’t at 100% funded status in the course of a given year, they state that the pension is somehow in grave jeopardy and that its unfunded liabilities need to be paid immediately to ensure the pension is “debt-free.” They then calculate a supposed “taxpayer burden,” or an amount each taxpayer will have to pay to meet their state or local pension’s unfunded liabilities. 

These tactics, which are often amplified by news outlets critical of public pensions such as the Center Square, are designed to elicit fear that taxpayers will have to fork over a large bill at some point in the future for their area’s pensions. 

Author(s): Tristan Fitzpatrick

Publication Date: 2 June 2021

Publication Site: National Public Pension Coalition