Navigating the difficult waters of unfunded liabilities and public pension reform can be a daunting task, which is why the American Legislative Exchange Council Center for State Fiscal Reform has created Keeping the Promise: State Solutions for Government Pension Reform.
While much of the private sector recovers from the 2008 stock market crash, unfunded pension liabilities are becoming a greater and greater threat to state budgets. Keeping the Promise provides legislators and policy experts with solid principles for pension reform based on past successes in the states, especially Utah, Michigan, Alaska and Rhode Island. The solutions and model policies found in the report offer a bipartisan approach to reform and present ways to fulfill existing pension promises while suggesting future reforms.
The report includes a guide to model policies and a series of useful resources designed to help legislators navigate the intricate details of public pension policies. The report also contains a detailed section establishing principles for pension reform:
Principles for Pension Reform
- Pension reform should remove the risk that states will go functionally bankrupt due to pension obligations
- Pension reform should make sure that commitments and obligations to current workers are fulfilled
- Pension plans should be predictable and defined
- The public (taxpayers) should not bear all the risk of pension plans
- No pension plan should be exempt from scrutiny
- Retirement plans should not lock employees into the public sector
The report is authored by Dan Liljenquist, a former Utah state senator.