TheHonorable Devin Nunes
United States House of Representatives
1013 Longworth House Office Building
Washington, DC 20515
DearRepresentative Nunes:
Onbehalf of the 362,000 members of the National Taxpayers Union (NTU), I write tooffer our support for your legislation to provide a much-needed dose offinancial transparency for state and local government employee pension plans.
Pensionshortfalls, whose fundamental causes predate the slumping economy, are leavingmany 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 budgetscan be attributed to obscure government accounting rules, particularly relatingto valuation of plan assets and liabilities. With few real disclosurerequirements, states are at even further risk of not only jeopardizingretirement packages for active and retired employees, but also putting taxpayersin grave danger.
Yourlegislation would implement sensible, vital reporting mandates for falteringretirement systems whose administrators must learn to confront reality. Morespecifically, your bill would require state and local government employeepension plans to file annual reports that include the following: a schedule offunding status; a schedule of contributions by the plan sponsor; a projectionof annual contributions, fair market value of assets and liabilities, andfunding percentage; actuarial assumptions and an accurate number ofparticipants; investment returns; and the manner in which they intend todecrease unfunded liabilities. Additionally, your legislation would compel theSecretary of Treasury to publicly disclose all of this information oncereceived. All told, your bill discourages a federal taxpayer-subsidized bailoutof state and local pension plans, which we believe would yield severeconsequences in an already dismal economic climate.
Wecommend your efforts to increase accountability within state and localgovernment employee pension plans, both to beneficiaries and taxpayers. Fortheir sake, we look forward to helping you enact this critical legislation asquickly as possible.
Sincerely,
Jordan Forbes
FederalGovernment Affairs Manager