Congress is considering establishing federal standards for state and local government pension plans similar to those imposed on private plans by the Employee Retirement Income Security Act of 1974. The act generally provides that the minimum standard for pension funding by private employers be an annual contribution for normal costs plus the amount needed to amortize current unfunded liabilities in 40 equal annual installments. Public pensions are becoming a large financial burden on state and local governments, and that burden will increase in the future. Many jurisdictions do not systematically fund retirement benefits accruing to their employees.
Matter for Congressional Consideration
|Congress should closely monitor actions taken by state and local governments to improve the funding of their pension plans to determine whether and at what point congressional action may be necessary in the national interest to prevent fiscal disaster and to protect the rights of employees and their dependents.||Congress has been monitoring state and local plans. Based on increased attention to plan funding by state and local governments, this recommendation is not valid as long as such attention continues.|