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By PBN Staff
By PBN Staff
WASHINGTON – A report released Tuesday by the American Legislative Exchange Council highlighted Rhode Island and three other states as models of effective pension reform.
The report, called “Keeping the Promise: State Solutions for Government Pension Reform,” offered solutions to states facing large unfunded liabilities on public employees’ pensions. Estimated liabilities range from $730 billion to $4.4 trillion, mostly stemming from the 2008 market crash, according to a release.
The report profiled Rhode Island, Alaska, Michigan and Utah as states that have effectively reformed their pension systems.
The Ocean State passed sweeping reforms to its public retirement plan in November 2011, aimed at cutting $3 billion from the state’s unfunded liability, estimated at $7.3 billion at the time.
Public-sector unions have filed suit to block the pension reforms and remain in mediation with lawyers for the state over the issue. Last week, the lawyers for both sides requested more time to discuss a potential settlement before the suit goes to trial, WPRI reported.
“Lawmakers on both side of the aisle know we cannot grow out of this problem,” said report author Dan Liljenquist, a former Utah state senator. “State policymakers must first recognize the scope and size of the problems with funding states’ pension plans and understand to fulfill existing pension promises and avoid bankruptcy, essential changes must be made.”
In addition to the state-level success stories, the report presents a range of solutions to unfunded pension liabilities and offers principles for pension reform, including the stipulation that “no pension plan should be exempt from scrutiny,” according to the ALEC release.