A new website released this week not only shines a spotlight on the public pension crisis facing America, but goes three steps further to thoroughly examine the problem, root causes and consequences, and offer thoughtful solutions.
PensionSecurity.org was created by the Laura and John Arnold Foundation to help cities and states develop pension systems that are affordable, sustainable and secure. Aside from laying out the problem and ways to overcome it, the site offers an assortment of tools and resources to help taxpayers, public workers, policy leaders and other stakeholders dive further into understanding the complexities of U.S. pension systems.
State and local pension debt is estimated at $1.7 trillion to $5 trillion. Taxpayers pay more and more for public pensions each year, yet pension debt is continuing to skyrocket. According to the site, governments’ pension payments, as a percentage of payroll, have nearly tripled since 2001.
In the meantime, public workers face benefit reductions and wage freezes, and governments have cut a half-million positions since 2008. Coming full-circle, communities are being forced to choose between cutting public services, such as teachers, safety officers and road improvements, and raising taxes in order to cover pension costs.
There are three things that must happen, according to the site, for governments to begin to rein in the problem and eventually get ahead of it:
- Governments must pay off pension debt.
- Governments must adopt reforms that ensure pension plans are affordable and sustainable.
- Governments must improve transparency.
The Retirement Security Initative couldn’t agree more. We believe that state and local governments have a responsibility to provide essential services that protect the safety, health, welfare and quality of life for all Americans; have an obligation to ensure that their retirement plans are sustainable, fiscally sound and responsibly managed so that all retirees and employees get paid what they have earned; and solutions to the funding and cost crises need to be developed with input from employees, retirees, labor, management, taxpayers and fiscal experts.
We're excited about the new PensionSecurity.org website and encourage you to check it out and add it to your bookmarks as a go-to resource on all things pension reform.