Letter
NTU Supports Pension Transparency Legislation
A Letter to Representative Devin Nunes
December 2, 2010
The
Honorable Devin Nunes
United States House of Representatives
1013 Longworth House Office Building
Washington, DC 20515
Dear
Representative Nunes:
On
behalf of the 362,000 members of the National Taxpayers Union (NTU), I write to
offer our support for your legislation to provide a much-needed dose of
financial transparency for state and local government employee pension plans.
Pension
shortfalls, whose fundamental causes predate the slumping economy, are leaving
many states strapped for cash and questioning how best to remedy the problem.
Reports show unfunded liabilities in all fifty states totaling anywhere between
$1 trillion and $3 trillion. Much of the unpredictability of pension budgets
can be attributed to obscure government accounting rules, particularly relating
to valuation of plan assets and liabilities. With few real disclosure
requirements, states are at even further risk of not only jeopardizing
retirement packages for active and retired employees, but also putting taxpayers
in grave danger.
Your
legislation would implement sensible, vital reporting mandates for faltering
retirement systems whose administrators must learn to confront reality. More
specifically, your bill would require state and local government employee
pension plans to file annual reports that include the following: a schedule of
funding status; a schedule of contributions by the plan sponsor; a projection
of annual contributions, fair market value of assets and liabilities, and
funding percentage; actuarial assumptions and an accurate number of
participants; investment returns; and the manner in which they intend to
decrease unfunded liabilities. Additionally, your legislation would compel the
Secretary of Treasury to publicly disclose all of this information once
received. All told, your bill discourages a federal taxpayer-subsidized bailout
of state and local pension plans, which we believe would yield severe
consequences in an already dismal economic climate.
We
commend your efforts to increase accountability within state and local
government employee pension plans, both to beneficiaries and taxpayers. For
their sake, we look forward to helping you enact this critical legislation as
quickly as possible.
Sincerely,
Jordan Forbes
Federal
Government Affairs Manager
