| November 1, 2010
Defusing Oklahoma's pension bomb
[This Marlin Oil advertorial appears in the Nov. 4 issue of The City Sentinel.]
Other than government spending, especially the glaring necessity to “right-size” expenditures, the most important issue facing our new governor and the Legislature is the pension crisis.
A group called the Public Pension Coalition held a press conference last week to call on lawmakers to do, essentially, nothing. The coalition includes the Oklahoma Public Employees Association, firefighters, and the state affiliate of the American Federation of Teachers.
Like other tax consumers, the groups refused to identify for reporters any potential budget cuts that might free up resources to finance direct deposits into troubled pension and retirement plans for public employees. They said “keeping faith” with government workers requires we leave the benefit system as is, yet do something, somehow, to avoid catastrophe.
However, the strongest of the government pensions is only at 75 percent adequacy. Actuarial analysts believe 80 percent is the minimum comfort level. Of course, the weakest of all the programs is the Teachers Retirement System, operating now at less than 50 percent adequacy.
Treasurer Scott Meacham has said our teachers’ system is one of the nation’s two or three worst.
As Pat McGuigan reported recently for CapitolBeatOK, “Providing a context for establishment of the Public Pension Coalition is the announced intention of House Speaker-elect Kris Steele of Shawnee to undertake major pension reform when the Legislature returns in early 2011.” McGuigan also notes that some recent studies “have said the challenges ahead for teacher retirement systems are even worse than has been reported.”
[OCPA research fellow] Steve Anderson, a veteran of budgeting from the Keating years, has unveiled over recent weeks a plan to shift new public employees away from defined benefits toward defined contributions.
His plan would require no matching payments by employees, but would free up short-term resources and allow the state to “cash-flow out” debt now in the system. It would take decades, but would slowly avert the nightmare inherent in the current structure of government pensions.
One can sympathize with members of the Public Pension Coalition, but they used rhetorical sleight-of-hand when they declared they opposed “balancing the budget on the backs of Oklahoma workers.”
Trouble is, what Anderson calls “Oklahoma’s pension bomb” does not leave inaction as an option. If incoming-Speaker Steele and his colleagues have the courage of their convictions, the current generation of Oklahomans might yet avoid a catastrophe that would fall like a thousand anvils on the backs of our children, grandchildren, and great-grandchildren.