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Dose of Reality for Underfunded MN Public Pensions

American Experiment has long warned taxpayers and legislators to the threat posed to taxpayers and recipients by Minnesota's underfunded public pension system. But a new Bloomberg analysis of our state public pension system might be the wake up call that cuts through the politics that prevent progress on pensions. Here's how American Experiment's Kim Crockett put it in a column for today's Star Tribune. Bloomberg has called attention to the fact that the financial stability of Minnesota pensions, relative to other states, has plummeted, and that even judged against its own standards, the system is in big trouble. The system admits to...

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Minnesota’s public-pension system is in crisis, new data shows

State's system is losing ground fast, relative to others. Here's why.  This op-ed originally appeared in the Star Tribune on Sunday, September 10, 2017. Bloomberg Markets recently released a bombshell of a story on Minnesota’s public-pension system. “New Math Deals Minnesota’s Pensions the Biggest Hit in the U.S.” It reported that “Minnesota’s debt to its workers’ retirement system has soared by $33.4 billion, or $6,000 for every resident, courtesy of accounting rules. The jump caused the finances of Minnesota’s pensions to erode more than any other state’s last year … .” Bloomberg has called attention to the fact that the financial stability of Minnesota pensions, relative...

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Pension Omnibus Bill: Show Me the Money

The bill is an attempt to sober up (more realistic assumptions, paying more in contributions while lowering COLAs) but still sneaks the old sauce hoping no one will notice (big increases for taxpayers, modest increases for employees, without fully funding the base benefit). And then there’s that big balloon floating out there in 2047. ...

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Tweet This: Police Pensions Ought to Be Fully Funded

There is an old saying: don’t kill the messenger: I was invited to testify at the Pension Commission this week. In response, a few tweets went out from the Teamsters Local 320 Public & Law Enforcement that made it clear that we have a communication problem. So, this post is written to the rank and file out there, the thin blue line that looked fierce sitting behind me Tuesday night. There is another saying: don’t argue with math. ...

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Crockett and Actuary Testify at the Pension Commission: Keeping the Pension Promise

Kim called for all pensions to be fully funded, and testified that, “We have made promises without paying for them, shifting the costs on to young employees and our children.” She concluded that the Pension Commission should seriously begin to consider closing at least some of the plans to new employees to avoid further unfunded liabilities. She said, “When you are in a deep hole, it is a good idea to stop digging.” ...

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Why there is no budget surplus now– or in the foreseeable future

Governor Dayton’s team has projected a $1.87 billion-dollar surplus. Before anyone pats themselves on the back, recall that there is the not so small matter of a pension deficit. When you add in all funds, Minnesota is short by about $18 billion. And that is using the “happy talk” fiscal assumptions. Talk about fake news! ...

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Brexit, Uncertainty and Pension Losses: there is a lot of that going around

You have to wonder what Brexit will be blamed for next. Even The Wall Street Journal on Monday reported on the front page, “Pensions Pressed Further by Brexit.” The front-page article reported, “For officials who manage retirements of public and private-sector workers, Brexit exacerbated problems that have been roiling pensions around the world for years. The low-rate environment has pulled down returns, inflated funding gaps, encouraged larger investment risks and prompted plan officials to scale back future investment assumptions.” Now “this problem is snowballing,” said Colorado Treasurer Walker Stapleton. The article explained, “Pensions determine their assets and liabilities through formulas that depend...

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