Myths and Facts about Public Pensions

I received some information about pension plans in Minnesota. There seems to be an anti public worker / organized labor attitude from some in the state.  I do not agree with this sentiment.

There is a belief that because some people have lost benefits everybody should.  Why?  We are the wealthiest country in the history of the world.  There is no reason that we should be worst off than we were in 1985.

Just remember if benefits really do get out of line, don’t blame collective bargaining groups that are doing their job.  Rather blame incompetent elected officials who aren’t doing theirs…

Myth: Pensions are a huge drain on government resources in Minnesota.

Fact: Nationwide, public pensions currently account for only 3.8 percent of state and local spending. That’s according to a recent study by the Center for Retirement Research at Boston College. Even accounting for the current unfunded liabilities of public pension systems, the share of state and local budgets dedicated to retirement benefits would rise to only 5 percent over the next 30 years.

According to census data compiled by the National Association of State Retirement Administrators, the percentage of government spending dedicated to pensons in Minnesota falls below that national average.

Myth: Taxpayers are on the hook for all of Minnesota’s public pension costs.

Fact: Over the last 20 years, taxpayers (through employer contributions) have paid only 18 cents on the dollar of the total revenues of the three statewide pension systems.  Deductions from our members’ paychecks made up 15 percent of  pension plan income, and the return on the investment of those contributions has been responsible for 67 percent of our total revenues. (2010 comprehensive financial reports of PERA, MSRS, and TRA)

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