Pension Legacy Costs Addressed in Stamas Legislation
Mon, 04 Dec 2017 06:02:28 EST
Municipal pension legacy costs and whole funding of the same are addressed in proposed legislation introduced by 36th State Senator Jim Stamas (R-Midland).
Statewide, local municipal governments owe nearly 19 billion to pension funds or health care obligations of current or retired workers. Many have not kept up with expected contributions, usually due to budgets, work force reduction through attrition, or investments not performing as expected.
As of a few years ago, accountants are required to include pension liability in annual audit reports.
The Stamas legislation would create a five-stage stress system. Governments that have an excessive liability would be subject to additional reporting to the state. Other requirements may include forming a Local Retirement Stability Board to develop an action plan.
For severe financial issues, and if government and labor cant agree to a plan, a three person Financial Management Team would be established. That would include one resident of the community, a local government representative and a financial expert.
Stamas said many communities have recognized and taken steps to improve their situation. New reforms would help communities that are unaware of, or unable to solve the problem.