Government union chiefs often blame the nation’s looming public pension crisis on the failure of politicians to properly fund the benefits. A new study, however, reveals that a major problem is the tendency of elected officials to offer more and more goodies courtesy of the taxpayers.
The analysis, by Illinois-based Wirepoints, looked at state pension data from 2003-2016 and found it is “the uncontrolled growth in pension promises that’s actually wreaking havoc.” The growth in “accrued liabilities has been extreme in many states, often growing two to three times faster than the pace of their economies,” Wirepoints concluded. “It’s no wonder taxpayer contributions haven’t been able to keep up.”
Nevada finished high on the list of problem states. Between 2003 and 2016, the benefits promised Silver State public-sector retirees increased 148 percent, the study found. Economic growth in the state registered at 61 percent over the same period. During the 14-year window, Nevada experienced the nation’s fifth-highest “growth in promises.”
Some of the increases in accrued liabilities can be attributed to unusually low interest rates during the period studied. But until lawmakers in Nevada and elsewhere stop buying votes from the powerful government unions through overly generous defined-benefit public pension plans funded by average taxpayers, the problem will continue to worsen.