AFP Testifies on Pension Reform Review
HB 13: Public Pension Review – February 25, 2013
By: Peggy Venable, Texas Director
Americans for Prosperity-Texas has worked to educate the public on government debt. According to the Texas Bond Review Board, local government debt in Texas is a shocking $324 billion – it has grown $2 billion in one year.
Government debt represents a liability we are placing on future taxpayers. We are leaving our children and grandchildren with a legacy – a legacy of debt.
But the $324 billion figure does not include public pension liabilities. And some pension funds’ long-term viability is disconcerting. The health of these pension plans is vital to the state and to local communities. These liabilities will impact government’s ability to provide essential services.
We have concern that most public pension plans are defined benefit plans while the private sector plans are primarily defined contribution plans. So while the liabilities to taxpayers may be increasing, the private sector taxpayers pension plans – if they have one – is likely to be much more frugal.
We want public pension plans to be actuarially sound and with the new Government Accounting Standards Board (GASB) standards for valuation of public pension assets and liabilities, we need to be prepared.
Texas has over 2 million members of state and local pension plans and while the state plans appear to have better funded ratios, some local plans are very problematic.
For instance the City of Houston’s Municipal Employee Pension System’s unfunded liability is almost $1.5 billion. The Dallas Police and Fire Pension System-Combined Plan has almost $1.2 billion in unfunded liabilities.
The Texas Comptroller has done some excellent work on this issue and the report “Your Money and Pension Obligations: Keeping a Sharp Eye on Public Pension Obligations” is eye-opening. We commend Comptroller Susan Combs for her Texas Transparency Project for helping better educate the public on
We support this bill. Texas must improve the management and transparency of public pensions to protect public workers and taxpayers.