The topic of public pensions is an important and complicated one, and it is easily oversimplified. I want to respond to the Missoula Independent article “Private players: Billionaires attempt to remake Montana’s pension system” (Oct. 31) and explain how The Pew Charitable Trusts approaches this important issue.
Maintaining sustainable public retirement systems is arguably one of the most significant fiscal challenges facing states, including Montana, which had amassed $1.5 billion in unfunded pension debt even before the 2008 recession hit. By the end of 2012, the state’s retirement systems were collectively only 64 percent funded, well below the level needed to ensure the systems’ long-term fiscal health. If not addressed, the state’s growing pension debt of $4.3 billion would threaten public workers’ salaries and benefits and could crowd out other essential state services. Montana needed to find a balanced set of solutions that would offer retirement security to public workers while protecting taxpayers and maintaining the ability to deliver important public services.
Pew works on this issue to improve public policy, and with no hidden agenda. All public employees—past, present, and future—deserve a secure retirement. This begins with paying for pension promises that have already been made. But policymakers also need to ensure that they have a sustainable retirement system for the future. This can involve keeping the existing retirement plan but doing a better job of funding it. And it can also involve looking at how pension plans are designed.
At the end of the day, there is no one-size-fits-all solution. How states choose to address pension challenges is up to their policymakers and citizens to decide. Going forward, we need an honest discussion centered around a fair set of solutions that will offer retirement security to public workers while protecting state taxpayers and maintaining the ability of states to deliver important public services.
Public Sector Retirement Systems
The Pew Charitable Trusts