February 10, 2010 Retirement Reform
No one working in the public sector wants to significantly alter the current pension benefit system. But the financial collapse in 2008 has cost the state of Utah billions of dollars with investments in the Utah Retirement System, significantly weaking the funding ratio (assets to retirement liabilities). The bills sponsored by Senator Liljenquist (SB 43 and SB 63) will be in committee today at Noon.
After months of policy debate and discussion over this issue the League has determined to support both pieces of legislation. It became apparently early to the League policy committee working on this issue that the option of ‘do nothing’ with regard to pension reform was not an option. Currently the employer contribution rate for the big system (with most public employees) is around 13%. If that rate is not changed (increased) the funding ratio will drop dramatically…and eventually bankrupt the system (leaving not assets to meet contracted benefit obligations to current employees) within 30 years, depending on investment returns.