Changing the way government employers report pension plan performance could increase their stability and overall fiscal realism – or force governments to cut back on valuable social programs for no particularly good reason.
Witnesses gave those assessments today during a House Ways and Means Committee oversight subcommittee hearing on the public employee pension funding controversy.
Rep. Charles Boustany Jr., R-La., the subcommittee chairman, is supporting H.R. 567, a bill that could require government employers to report fair market values of plan assets and the value of plan liabilities using Treasury yields as the discount rate.
Today, Boustany said, it is not clear whether the amount of underfunding is $700 billion or about $3 trillion, but it is clear that better information is needed.
Colorado Treasurer Walker Stapleton, who serves on his state's retirement plan board, noted that his state's plan now sets its official rate of return at the "unrealistic and unachievable" level of 8%.
The current "riskless rate" is about 5%, witnesses said.
