A statement for a hearing of the House Ways and Means Committee’s Oversight Subcommittee prepared on behalf of various organizations representing state and local government retirement systems said Federal proposals on transparency (see Public Pension Transparency Bill Reintroduced in the House) would levy a whole new and conflicting Federal reporting regime on top of existing state and local structures and rules of the Government Accountability Standards Board. In addition, they would paint a misleading picture of public finance and impose costly measures and threaten the current tax-exempt status of state and local government bonds, the groups said.
They also argued that the legislation ignores the extensive efforts made at the state and local levels to close short-term budget deficits as well as address longer-term obligations such as pensions.
“At a time when Congress and the Administration are both discussing the need to remove regulatory barriers, it makes little sense to impose disruptive and costly federal mandates that interfere with state and local government recovery efforts already underway, do not allow states and localities to adopt tailored solutions to meet their unique long-term needs, and set a dangerous precedent with regard to Federal taxation of state and local government bonds,” the testimony said.
In addition, Hank Kim, Esq., Executive Director & Counsel of the National Conference on Public Employee Retirement Systems (NCPERS) offered a statement saying that with a very few but well-publicized exceptions, public pension plans are healthy, economically efficient, and making the changes necessary to ensure their long-term sustainability. Kim said recent research reports are based on out-of-date data from the low points of the recession and cites the group’s own research showing public pension funds are experiencing a robust recovery from the market downturn of 2008-2009 (see Group Says Report on State Retiree Benefit Funding is “Flawed”).
The Transparency and Funding of State and Local Pension Plans hearing followed an analysis by the Pew Center on the States reporting that public pension deficits grew to at least $1.26 trillion in fiscal year 2009 (see Report Indicates $1.26T Funding Gap for State Retiree Obligations).It also coincided with a report from the Congressional Budget Office weighing in on current public pension accounting methods (see Fair-Value Measure Truer Picture of Public Pension Costs).