Dustin Gawrylow, Mandan, N.D., column: Pension thundercloud looms on N.D.’s horizon
December 13, 2012 at 12:00 pm in Grand Forks Herald
In the past two years, North Dakota’s public pension funds have continued the downward slide that began in 2008. They now represent a $2 billion unfunded liability over the next 30-odd years. Continue Reading
I am one of the more skeptical members of these boards when it comes to labor. That said, I think your argument may be off in several areas:
1. There is nothing intrinsically wrong with fixed benefit plans. Your characterization of them as antiquated is unfair.
2. You said that receiving a fixed benefit regardless of what the market does is unrealistic. One question: do your monthly bills go down just because the market does? When your 401K lost 25% of its value a few years ago did your mortgage drop an equal amount?
3. The problem is not the plan, but the funding. Funding a project at 60% of cost then expecting ridiculous returns on investment to make up the difference? Even 6% return has been unrealistic for several years. 4% is more likely.
If the state wants out of the retirement business that is fine. I am sure the quality of people it will attract will reflect this but the state will survive; just put the blame where it is due. The problem is not the plan, it is with legislators who want something for nothing
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Why is the private sector on the hook for the day-to-day value of these accounts? My retirement account doesn’t have one.
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