State and local governments traditionally provide employees with defined benefit pension plans, which guarantee a certain amount of retirement income for life. The economic downturn has impacted state and local government revenues and the costs associated with maintaining these plans. According to reports, state and local pensions' unfunded liabilities are on the rise. By some accounts, state and local pensions' unfunded liabilities approach one trillion dollars. Others report that these unfunded liabilities may actually exceed three trillion dollars. State and local governments have rigorous accountability requirements through statute and regulation and follow very strict accounting standards. Warranted or not, new legislation has been drafted to address perceived problems with state and local public pensions. Called the Public Employee Pension Transparency Act (H.R. 567), the bill requires state and local governments to accurately report their financial liabilities, including the cost of pension plans for public employees. To accomplish this goal, the bill would require state and local government pension plans to report their funding status to the U.S. Department of the Treasury ("Treasury"), and the Treasury to post such information on a search-enabled public website. In addition, the legislation would deny a federal tax exemption for bonds issued by government entities that do not comply with the new disclosure requirements and would bar the federal government from bailing out public plans. The bill was initially introduced as 111 H.R. 6484 on December 2, 2010 by House Ways and Means Committee member Rep. David Nunes (R-CA), then incoming Budget Committee Chairman Rep. Paul Ryan (R-WI), and then incoming Government Reform and Oversight Chairman Rep. Darrell Issa (R-CA). The bill was reintroduced as 112 H.R. 567 by Rep. Nunes on February 9, 2011 and referred to the House Ways and Means Committee the same day. The bill appears to have garnered additional support from members of Congress since its initial introduction, as 46 members have joined Rep. Nunes as cosponsors of H.R. 567. If passed in its current form, the bill could dramatically impact state and local pension plans.
The economic downturn has impacted state and local government revenues and the costs associated with maintaining defined benefit pension plans and unfunded liabilities are on the rise. Legislation has been drafted to address perceived problems with state and local public pensions to require them to accurately disclose their financial liabilities to the Department of the Treasury. This bill could dramatically impact state and local pension plans....
Access the full version of "James Wilson onThe Public Employee Pension Transparency Act" with your lexis.com ID. Additional fees may be incurred.
If you do not have a lexis.com ID, you can purchase this commentary and additional Emerging Issues Commentaries from the LexisNexis Store.
Lexis.com subscribers can access the complete set of Emerging Issues Analysis for Labor & Employment Law and the Labor & Employment Area of Law page.
For more information about LexisNexis products and solutions connect with us through our corporate site.