Center President/CEO Elizabeth Kellar gave an overview of public pension reforms at the National Association of Counties (NACo) Legislative Conference in March. Her talk looked at why pension headaches won’t go away, and why some plans are in better shape than others.
“Current fiscal conditions, along with changing demographics and employment structures,” she said, “are prompting many local governments to reexamine their retirement systems.”
Kellar said that a new challenge facing local government officials is to understand – and explain – what she called “dueling pension calculations.”
The Governmental Accounting Standards Board has issued new accounting standards that change the way governments calculate and report their pension liabilities. Bond ratings agencies use another set of criteria to assess the impact of pension obligations on a municipality’s credit worthiness.
“But the most important pension number of all is what the government should budget each year to meet its pension obligations,” she said. ”That is what needs the most attention now.”
NACo and the national associations of state and local governments are part of the Pension Funding Task Force, which has issued a primer for elected officials on what they should address in their pension funding policy.