US - Public pension plans would have to make their funding status publicly available under proposals introduced by Republicans set to take control of the US House.
The Public Employee Pension Transparency Act, introduced by incoming budget committee chairman Congressman Paul Ryan, would demand that state and local government pension plans report to the Secretary of the Treasury the funded status of those plans, and that the information be made publicly available via a searchable website.
In addition to publishing existing financial data, funds would also have to report their methods and assumptions and report their liabilities using a uniform accounting standard that provides realistic rates of return and tie assets to more reasonable fair market valuations.
Earlier this year, The Pew Center on the States issued a report declaring that state pension plans are underfunded by $1trn. In 2008 only four states had fully-funded pension systems - down from over one-half of all states in 2000.
The bill, which provides enhanced transparency for state and local pensions, also establishes a clear federal prohibition on any future public pension bailouts by the federal government.
"As we speak, lucrative pension promises are being made to public employees that taxpayers simply cannot afford. The plans themselves admit to more than a $1trn in unfunded liabilities," said Congressman Devin Nunes. "Unfortunately, the true level of unfunded liabilities associated with these plans - perhaps more than $3trn - is being hidden thanks to unrealistic accounting standards."
Ryan added: "We need to ensure that state and local governments are accurate and honest in detailing their financial liabilities, including the cost of pension plans for public employees. The Public Employee Pension Transparency Act will make government more accountable to taxpayers by shining a light on the financial soundness and unfunded obligations associated with these plans."
Congressman Darrell Issa, incoming chairman of the oversight and government reform committee and the third member to support the bill, said: "The American people have a right to know the truth about the unfunded liabilities being run-up by state and local pensions.
"Quite frankly, if they have nothing to hide, there's no reason why the states and local governments who control public employee pensions should not embrace this effort to ensure that the taxpayers have a more transparent accounting of the true nature of pension liabilities."
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