Comptroller candidate Harry Wilson is right on this one.....The Paterson proposal to allow the state and local governments to pay some of this years pension contributions over time is just a bad idea happening to a bad system.
Its in essence borrowing...something the Governor said he would not do.
And the assumption that the pension fund portfolio will earn an "industry standard' of 8% a year is crazy.
We don't need a defined benefit system in today's world....we can't afford all the six figures pensions and if were are going to have all that, we cannot afford all these rosy assumptions. It is actuarily unsound....And as a component of the Governor's "or else" budget on Monday, it's wrong.
The problem is pension contribution rates are soaring...especially for localities because so many of their employees are in the lucrative 20 year and your out plans for police and fire. If the law says they are to be paid now...so be it...find the economies needed to meet those obligations.
We cannot again just kick the can down the road.
Pension option sparks attack - Capitol Confidential