Pensions doing better than reported

The Hill’s April 11 article about public pensions was misleading (“US public pension system facing $3T funding gap: report”). It referred to a Financial Times article quoting Joshua Rauh, a senior fellow at the Hoover Institution, who said, “The pension problems are threatening to consume state and local budgets in the absence of some major changes.” 

The fact is, all 50 states and numerous localities have made changes to their pension benefit levels, financing structures or both in the past eight years. Moreover, as these changes have been implemented, aggregate funding levels have steadied to 73.2 percent in 2014, evidenced by a comprehensive survey of pension financial reports on publicplansdata.org. 

{mosads}The data show the vast majority of state and local public pensions are doing quite well in funding pension obligations. These are the plans that don’t make the headlines — but should.

In 2012, the U.S. Government Accountability Office published a report titled “State and Local Government Pension Plans: Economic Downturn Spurs Efforts to Address Costs and Sustainability.” A footnote in that report debunked the insolvency claims that had been predicted by Rauh in 2011: “The projected exhaustion dates are not realistic estimates of when the funds might actually run out of money.” 

In other words, the prediction of an exhaustion date is unrealistic because there are underlying funding disciplines of pension obligations carried out by state and local leaders throughout the U.S. These are disciplined funding practices that don’t make the headlines — but should. 

It is important to note also that a major change in reporting pension data is being carried out presently. The Governmental Accounting Standards Board, the independent agency responsible for financial accounting standards for state and local governments, recently completed a multiyear process of reviewing and revising its standards for public pension reporting. Significant changes go into effect this year requiring pension obligations to be more prominently disclosed in the financial statements of state and local governments. 

State and local governments are fiscally responsible for their pension plans — even those governments that don’t make the headlines. Congress should not mandate more costly disclosure requirements that conflict with the accounting standards state and local governments must follow. 

From Jeffrey Esser, executive director/CEO, Government Finance Officers Association, Chicago

Ignorance can be dangerous to your health. 

The Zika virus is far worse than we were previously told by the news media, not just to babies born to infected women, who often have severe brain damage and small heads (microcephaly) at birth, but to adults, who may also get brain damage from Zika. Many viruses, including HIV, attack brain and nerve tissue and also cause autoimmune inflammation of the brain when the body attempts to fight the virus. Ebola is still a serious potential threat; new cases have surfaced in African countries that claimed they had eradicated the current outbreak. Both Zika and Ebola can be transmitted sexually, even months after the infected person has “recovered.” The Centers for Disease Control and Prevention’s official brochure on Ebola failed to mention that it can be “casually” transmitted by coughing, sneezing, kissing, spitting and possibly even shaking hands. And while we know Zika is transmitted by mosquitoes and Lyme disease by ticks, which diseases can be spread by bedbugs and fleas? 

If we fail to secure our borders against these viruses, “there will be an epidemic that will turn our cities into a shambles,” to paraphrase Warner Oland in the 1925 film “Werewolf of London.”

From Gary Minter, Washington, D.C.