North Dakota’s Public Worker Pensions Represent 57% Of Unfunded Liabilities
About a month ago a group called State Budget Solutions released a report indicating that North Dakota’s pension funds for public workers have huge unfunded obligations totaling over $4 billion. When that report was picked up by the media here in North Dakota, the Dalrymple administration was quick to dismiss it.
“The biggest problem with this report is that they report that the state has $4 billion of pension debt,” Office of Management and Budget Director Pam Sharp told the Minot Daily News. “The $4 billion isn’t even close.”
Sharp and other government officials around the state use an absurd model for projecting pension fund obligations which assume a regular 8% rate of return on investments, something financial observers including Warren Buffett have described as “crazy.”
And now a new report from the Republicans of the Joint Economic Committee that pension funds around the nation are underfunded and that North Dakota’s, despite a booming economy, is among the worst with the pension funds here representing 57% of total state liabilities:
During the last legislative session there was an effort to address this problem. Rep. Bette Grande pushed legislation that would have funded existing pensions, but moved future public workers and teachers away from a defined-benefits pension (which, as the map above shows, are failing around the nation) into a defined-contribution pension like a 401k or an IRA. That would have eliminated these problems with unfunded obligations while maintaining the commitment made to current public workers.
Unfortunately it was killed after a heavy lobbying effort by the teacher and public worker unions in the state.
They say that the first step to solving a problem is admitting there’s a problem. Well there’s a problem in North Dakota, but many leaders in this state (up to and including Governor Jack Dalrymple) aren’t willing to admit it.
Tags: jack dalrymple, North Dakota News, pam sharp, Pensions
