Blogging Employee Benefits

March 1, 2006

Chicago Fed Blogs Public Pensions

Filed under: PERS, Retirement Policy — Fuguerre @ 7:48 am

For many, the issue of public pensions is a rather arcane subject best understood by actuaries and public finance experts.

Chicago Federal Reserve Bank President Michael Moskow, speaking at the organization’s State and Local Government Pension Forum, offered his take on “The Regional Perspective on Pension Issues” focusing on retirement income programs sponsored by state and local governmental employers. Moskow explained that public pensions’ exemption from ERISA’s minimum funding standards “made it easier to increase pension benefits to public sector retirees without identifying adequate funding.” But if he meant to be pointing to that exemption as one of the causes of public pension underfunding, eliminating that exemption or creating a PERS version of the ERISA funding standard was not one of the specific solutions Moskow put on the table, although pension financing discipline would be strongly implicated in all three of the recommendations Moskow did advance –

  • “More uniform accounting standards are likely needed” to improve understanding of public pension obligations. Moskow did not directly address early rumors that GASB may ultimately follow the road currently being taken by FASB, which for private companies will lead to new balance sheet charges or credits within the next year.
  • Public pension plans need to focus on “identifying new funding sources and restructuring pension payouts.” Moskow did recognize that for many jurisdictions, state law, state constitutions, and even the U.S. Constitution impede performance on the “restructuring pension payouts” side of that equation, leaving painful tax increases as the direction policymakers will need to look.

But what’s cool is that the Chicago Fed used the occasion of its public plan forum to give birth: welcome a new blog to the benefits world! Except that it’s not yet clear whether we might want to kick it down the road a bit with some comments and other encouragement, since at the moment it looks suspiciously as though it might have been using blog layout and syndication simply for pushing this particular single event. Even so, the existing content is worth marking. And hey, it’s not every day you see the likes of the Fed getting into blogging sweats.

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