Imposing Discipline on Promises of Public Pensions

I am not sure there is anything in this article that will surprise anyone who is a regular reader of this blog, or who follows the issues raised by public and private pensions, including their financing. More than that, I doubt there is anything in it that anyone knowledgeable about the subject will disagree with: writing about the crisis in public pensions, the author suggests that the proper response is to impose a legal structure, possibly similar to ERISA, that will force municipalities to fund their pensions as they go, rather than promising benefits and leaving them for future taxpayers (many, frankly, too young to vote – or even read - when the pensions are promised) to fund. Nothing too shocking there, although, in truth, I think what you would see in the public sector if that were enacted is exactly what you have already seen in the private sector: the replacement of pensions with some type of defined contribution type structure.

The article is aptly titled “The Long, Sorry Tale of Pension Promises,” and, despite the somewhat lukewarm introduction above to the article, I have to say that I liked the article and greatly enjoyed it, including its excellent presentation of the history of pension busts that led up to ERISA’s enactment. Its certainly worth a few minutes of your morning.