Resolution in Support of Pension Reform Bridge Funding and Compliant OPEB Liability Funding
Whereas, State, County and Municipal Governments have accrued trillions of dollars in unfunded Pension and OPEB Post-Retirement Benefit Liabilities over the course of many decades.
Whereas, these unfunded Pension and OPEB Liabilities have been recognized by the Bond and Credit issuing Institutions as a matter of grave concern that can and will affect the Bond and Credit Rating for all Public Sector entities that do not take compliant steps toward eradicating these liabilities.
Whereas, the Government Accounting Standards Bureau (GASB) has mandated that full disclosure of the Net Pension and OPEB Liability, on the Governmental Balance Sheet, unless a GASB compliant liability payment plan is executed and duly followed that will allow for the liability plus accruals (ARC Payment) within 30 years.
Whereas, the budgetary constraints facing all Governmental entities would preclude virtually all States, Counties and Municipalities from paying out of current and future Budgets an amount that would satisfy the GASB compliance mandate of 30 years to pay off the current Pension and OPEB Liability balances plus accrual.
Whereas, ignoring the effect these unfunded liabilities will have on future credit and Bond ratings is at best “kicking the can down the road” for not-too-distant future legislators to deal with in an even more precarious economic environment.
Now Therefore Be It Resolved, that the legislators of (insert State) are on record as supporting an initiative to explore the utilization of a Private Sector Funding Tool that has been utilized, very successfully, in the retirement of very large Pension shortfall and OPEB Liability funding over several years. This initiative will allow for complete and total investigation and due diligence by the governmental entity to make sure that all parties are informed and comfortable regarding the funding tool and the financial expectations upon entry into the solution and exit from the solution.
Be It Further Resolved, that each governmental entity will be treated as a unique situation and the recommended Solution will be tailored to the needs and desired outcome of the entity. All Solutions are “scalable,” within reason, to allow for each entity to enter into the Solution at a level they are comfortable with.
Be It Further Resolved, each governmental entity has pension and other post retirement benefits that were promised to current retirees and future retirees as a condition of employment. To greatly reduce or eliminate these critical benefits is not something any governmental entity takes lightly. Yet without alternative funding, that does not require millions of dollars out of current and future budgets, it would seem the only recourse is to negatively impact the retiree’s lives by reducing or eliminating these benefits.
There is a proven Pension Shortfall, Pension Reform Bridge Funding and OPEB Liability Funding Tool available and it is inherently important that the elected legislators take the necessary steps to explore the viability of implementing and utilizing this tool for the benefit of all.