Pension Legacy Cost Bill Passes State Senate
Thu, 07 Dec 2017 06:02:10 EST
State lawmakers burned the midnight oil Wednesday and early this (Thursday) morning, to approve a less radical approach to pension reforms.
The House and Senate could not get enough votes until they removed a provision to allow the state to take over a town's budget and sell assets as a way to fund pensions, similar to the so called "Emergency Manager" law.
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, or underperforming investments.
As of a few years ago, accountants are required to include pension liability in annual audit reports.
State Senator Jim Stamas (R-Midland) served on a bipartisan task force appointed by the governor that issued recommendations for dealing with the issue this past summer.
The legislation creates 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, or creating a financial management team.