Skip to main content

Story-Public Pension Death Spiral

 


"America is careening toward a fiscal crisis that makes 2008 look manageable, yet most taxpayers remain unaware that it is coming.

State and local governments currently owe $1.37 trillion more in pension benefits than they have saved to pay them, per the Equable Institute, and that uses accounting standards governments themselves prefer.  Apply the market-based discount rates Stanford economist Joshua Rauh of the Hoover Institution considers the only honest methodology, and the true shortfall reaches $5.1 trillion, roughly the annual GDP of Japan.

This a structural death spiral.  Rising pension costs force tax increases and service cuts, which drive out residents and businesses, which shrinks the tax base, which forces still higher taxes, until something breaks.  We have already seen a road map for what “breaks” looks like.  It is called Detroit."

Full Story American Thinker

Popular posts from this blog

Correctional Officers Federally Recognized as Public Safety Employees

As of January 1, 2025,  Correctional Officers are Federally Recognized as Public Safety Employees   the same as Police and Fire.  This has implications for disability, taxes and retirement. As we face new challenges to our pension in 2025 this will further the distinction between PERA General Plan members like 911 Dispatch and Probation and CO's in the PERA Correctional Plan. It's part  of the Secure Act 2.0. 26 USC § 72(t)()(10)  definition of Public Safety Employee - qualified public safety employee (10) Distributions to qualified public safety employees and private sector firefighters (A) In general In the case of a distribution to a qualified public safety employee from a governmental plan (within the meaning of section 414(d) ) or a distribution from a plan described in clause (iii), (iv), or (vi) of section 402(c)(8)(B) to an employee who provides firefighting services, paragraph (2)(A)(v) shall be applied by substituting “age 50 or 25 years of service u...
Read more

Confusion at today's PERA meeting

 I attended the PERA Board meeting remotely today (3/13/25). As all of you know there's lots of pieces at play in the PERA pension plans. There have been in the recent past attempts by 911 Dispatchers and Probation to be merged into the PERA Correctional Plan which MNCORA has vehemently opposed. The positive note from todays meeting is that the current discussion is centered around improved pensions (earlier retirement) for probation and dispatch without talk of adding them to the Correctional Plan.  The sad part is the apparent confusion among PERA Board members as to the difference between Essential Employees and Public Safety Employees. Some were using the terms interchangeably which could lead to future problems.  While Police, Fire, Corrections, Probation and 911 Dispatch are all essential employees  https://www.revisor.mn.gov/statutes/cite/179A.03 . Only Police, Fire and Correctional Officers are Public Safety! The Secure Act 2.0 spells out changes to the defi...
Read more

No seat on the PERA Board this year

  We are sad to report that our Bill to add a CO to the PERA Board is not going to be added to the Pension Omnibus Bill. We are told  it's due to PERA's opposition. We are thankful to those who authored the Bill-Representative Peggy Scott,  Representative Harry Niska, Senator Cal Bahr and Senator Jim Abeler.  The Bill is still good  next session and we have a couple of paths forward. PERA's main opposition is that adding another seat would make it an even numbered board. Disregarding the fact the largest pension board, the Teacher's TRA is even numbered. That can be remedied one of two ways. We can amend our bill to say one of the 3 existing General PERA Board seats will become a Correctional Plan member seat or because we are now Federally recognized as Public Safety Officers we make a bill to have the Police and Fire seat become Police, Fire and Corrections. There are after all more CO's than Firefighters and we are all now Public Safety Officers. Big decision...
Read more