According to a news release, the letter says state and local governments take seriously their responsibility for paying promised benefits.
Points made in the letter include:
- Comprehensive state and local laws, public accountability, and scrutiny provide rigorous and transparent regulation of public plans resulting in strong funding rules and levels;
- Public pension assets are professionally managed and invested on a long-term basis using sound investment policies;
- On the whole, public pension funding levels and investment performance have been found to meet or exceed those in the private sector;
- Public plan participants’ accrued benefits and future accruals are protected by state constitutions, statutes, or case law that prohibits the elimination or diminution of a retirement benefit.
“Our common goal is to set the record straight,” said Jeannine Markoe Raymond, director of federal relations for the National Association of State Retirement Administrators (NASRA), in the news release.
The letter explains that important distinctions between the public and private sectors, as well as the structure and governance of their pension plans, are often unrecognized or misunderstood, and, therefore, suggestions for the application of corporate finance measures to be used for public pensions are inappropriate (see Should Government Pension Valuations Follow Corporate Pensions’ Path? ).
In addition, the correspondence points out that state and local government employee pensions are designed much like the federal pensions provided to U.S. military and civil service personnel and, similarly, are backed by their sponsoring governments; however, one difference from federal plans is that state and local pension systems have pre-funded nearly 90% of their future benefits.
Recent studies by the U.S. Government Accountability Office, U.S. Census Bureau, and the Center for Retirement Research at Boston College (see Discipline Key to Well-Funded Public Plans) have backed the coalition’s point, showing that the majority of public pension plans are on track to meet future obligations.
Twenty organizations signed the letter, including the National Conference on State Legislatures, the National Association of Counties, the National League of Cities, and the U.S. Conference of Mayors. Employee groups signing the letter represent the nation’s teachers, firefighters, police officers, and state, county, and municipal workers. Full text of the letter will be available at www.nasra.org .