Resolution Opposing Federal Bailouts of State and Local Pension Plans

Summary

A resolution in support of federal legislation prohibiting the Secretary of the Treasury and the Board of Governors of the Federal Reserve System from providing bailouts or other financial assistance to a pension plan of a State or political subdivision thereof, and for other purposes.

Resolution Opposing Federal Bailouts of State and Local Pension Plans

Summary: A resolution in support of federal legislation prohibiting the Secretary of the Treasury and the Board of Governors of the Federal Reserve System from providing bailouts or other financial assistance to a pension plan of a State or political subdivision thereof, and for other purposes.

Model Resolution

WHEREAS, state public pension plans are underfunded by more than $6 trillion (using a risk-free rate of return assumption);

WHEREAS, the national average funded ratio is a mere 33.7 percent (using a risk-free rate of return); WHEREAS, the per capita unfunded state pension liabilities now exceeds $18,600 per capita; WHEREAS, county and municipal public pension plans are also woefully underfunded;
WHEREAS, public employees are impacted when governments default on pension payments;

WHEREAS, taxpayers and residents suffer from diminished essential government services and rising taxes resulting from unfunded pension liabilities;

WHEREAS, the possibility of a federal bailout of state and local government pension plans is a disincentive to reform;

WHEREAS, a federal bailout of state and local government pension plans would reward fiscal malfeasance and penalize fiscally responsible state and local governments;

NOW THEREFORE BE IT RESOLVED, that the legislature of {insert state} urges the United States Congress to enact legislation modeled after the State and Local Pensions Accountability and Security Act of 2017. Such legislation should prohibit the Secretary of the Treasury and the Board of Governors of the Federal Reserve System from providing bailouts or other financial assistance to a pension plan of a State or political subdivision thereof, and for other purposes.