President Obama has spent the last eight years governing by executive order and administrative rule. President Trump—aided by a Republican Congress—will have the capacity to dismantle some of the worst of these actions. One Department of Labor ruling especially ripe for scrutiny exempts states from federal regulations on private pensions. It thus allows the states—already responsible for massive problems with government-worker pensions—to begin offering retirement plans to private-sector workers. It’s a disaster waiting to happen.An article , well worth your time.
State and local governments have already racked up at least $1.5 trillion in debt in their public-worker pension funds through irresponsible funding practices, including promising benefits that were never funded and engaging in questionable accounting practices. This mess has developed free from federal regulation because state-worker pension plans are exempt from the strict standards of the Employee Retirement Income Security Act, which imposes stringent accounting standards on private pension plans and makes overseers of such plans liable for mismanaging them.
Incredibly, even as local governments continue to struggle with the public-pension crisis, governors and state legislators around the country have proposed letting states offer government-run pension plans for private-sector workers whose employers don’t provide retirement benefits. However, because they would be for private workers, these pension plans would have to adhere to ERISA standards. States could potentially be legally liable in court for mismanaging them. To get around this, states began petitioning the Obama administration for exemptions from federal law.
Thursday, November 17, 2016
How Trump Can Stop the Pension Mess from Spreading. The incoming administration should roll back federal rules allowing states to offer pensions to private-sector workers.
City Journal reports:
Posted by Steve Bartin at 4:55 PM