If State Workers Controlled Their Own Pensions We Wouldn’t Need More Legislative Oversight
The North Dakota legislature is considering legislation to give the state legislature more control over the state’s pension funds and investments. This is obviously in reaction to the poor fiscal shape those funds are in, they’re projected to run big deficits in the future, but I don’t see how this is going to help.
The problem with North Dakota’s pension funds is that they’re ponzi schemes. They rely on contributions by workers to pay out defined benefits to retirees. The only way to keep these schemes going in the long run is to keep adding people to the bottom of the period to pay out to people at the top.
If we went to a defined-contribution pension plan, where each state worker and teacher had their own retirement plan into which the state would pay a defined contribution, we wouldn’t have to worry about the state managing investments for tens of thousands of workers or whether or not the legislature should oversee and help manage those investments.
A defined-contribution plan means that the workers handle their own retirement management while still benefiting from contributions from the state.
North Dakota’s pensions don’t need more government oversight. They need less government management, period, and more control from those who are actually in the system.Tags: North Dakota News, Pensions