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Sen. Zarelli on Pension Funding Council rejection of actuary’s
advice
October 29, 2009
OLYMPIA…
Sen. Joseph Zarelli, Senate Republican member
on the six-person state
Pension Funding Council, issued this statement following the
council’s rejection this morning of the assumptions submitted by
the state actuary, which would affect pension contributions in
the 2011-13 biennium. The actuarial assumptions are provided
every other year, as required under
RCW
41.45.030:
“To accept the actuary’s advice and long-term economic
assumptions might present political challenges, but it would
make complete sense fiscally. Taxpayers are ultimately on the
hook for satisfying the state’s pension obligations, and
unfortunately for them a majority of the council members chose
to reject the assumptions. That’s discouraging but consistent
with the lack of long-term vision evident in Olympia’s spending
decisions, as the same thing happened two years ago.
“The Legislature should have caught up on its pension funding
contributions when the state was collecting an exceptional
amount of revenue and carrying a record surplus. Those of us who
preferred that approach knew it wouldn’t have been a popular
move, but it would have been the smart choice. Now, looking at
the 2010 session, there are two smart choices the Legislature
should make. One is to overrule the Pension Funding Council and
endorse the actuary’s new assumptions, which include a reduced
return on investment – a figure derived using the State
Investment Board’s model for predicting returns. The second is
to pass
Senate Bill 6045
and
Senate Bill 6046,
which would take politics out of the pension system and preserve
full funding in pension plans once they reach that level.
“It’s hard to believe things could deteriorate to the point that
pension checks will have to be written directly out of the
general fund, which would take money away from other public
services. But decisions like the one made today keep us drifting
in that direction.”
Background: Budget Tidbits,
September 2009 and
October 2007
—30—
For more information contact
Eric Campbell
at (360) 786-7503 or
campbell.eric@leg.wa.gov
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