Foundation Releases Study on Retirement Benefits Reform

GEORGIA PUBLIC POLICY FOUNDATION NEWS RELEASE
For Immediate Release
February 25, 2014
Contact Benita Dodd at 404-256-4050 or benitadodd@georgiapolicy.org

Foundation Releases Study on Retirement Benefits Reform

Unfunded Liabilities an Urgent, Growing Burden, Analysis Concludes

Atlanta – Across the nation, cities and states are staring at a mountain of unfunded government pension and other employee benefits. For decades, public officials have freely doled out rich benefits to public employees, knowing the bill won’t be due until far in the future; what George Will describes as “‘IBG, YBG:’ I’ll be gone and you’ll be gone when the reckoning arrives.”  

Reckoning is rapidly approaching for these governments and the taxpayers who fund them, according to a study released today by the Georgia Public Policy Foundation, “A Case for Changing Public Retirement Benefits in Georgia (and Possibly Elsewhere).”  

“Georgia’s pension plans are relatively rich and they have been well funded,” according to the study author, Atlanta attorney and CPA Allen Buckley.  

“However, Georgia’s Other Postemployment Benefits plans (OPEB) have been poorly funded. New accounting rules for pensions and OPEB are likely to cause Georgia’s combined pension/OPEB systems to be substantially underfunded beginning in 2014,” Buckley warns.

Buckley undertakes an in-depth analysis of Georgia’s current situation and presents a roadmap for bringing Georgia’s future pension and employee benefit obligations in line with economic reality. 

A serious look at Georgia governments’ hidden obligations is long overdue, said Kelly McCutchen, president of the Georgia Public Policy Foundation. 

“The sooner you address these problems, the easier they are to fix,” McCutchen said.  

“Georgia deserves credit for funding its pensions plans and for shifting state employees hired after 2008 into hybrid pension plans. But this taxpayer burden has been a silent and growing epidemic.  

“We have a great opportunity over the next few years to address our remaining long-term fiscal challenges. Allen Buckley’s study is a harsh reminder of the unhappy legacy of these ‘benefits’ to Georgia’s taxpayers, children and grandchildren,” McCutchen added.  He discussed the new report at our February 26 Leadership Breakfast in Cobb County.

The full study is available here and at the Foundation’s Web site, www.georgiapolicy.org.

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