Twenty National Organizations Dispute Portrayal of State & Local Retirement Systems...

Twenty National Organizations Dispute Portrayal of State & Local Retirement Systems In Letter To Congress

WASHINGTON--(Business Wire)--
A broad coalition of government officials, retirement systems, and
unions has sent a letter to Congress saying the use of inappropriate
and incomplete information by some organizations distorts the truth
regarding public pension finance.

"Our common goal is to set the record straight," said Jeannine
Markoe Raymond, director of federal relations for the National
Association of State Retirement Administrators (NASRA). She added,
"The fact is, state and local government pension systems are
collectively financially sound and getting retirement right for
Americans. These systems already have set aside some $3 trillion in
assets to pay for future benefits, clearly demonstrating that
pre-funding a modest and stable retirement income for the nation's
workforce is an attainable goal."

"Our own research is affirmed by recent studies conducted by
credible, independent sources. More specifically, public sector
pension plans have pre-funded nearly 90 percent of their future
liabilities for some 20 million Americans," said NASRA research
director Keith Brainard. He added, "Moreover, few pay attention to the
fact that more than three-fourths of the costs of these benefits is
paid from employee contributions and investment earnings, with less
than one-fourth of the cost paid by the employer/taxpayer."

Recent studies by the U.S. Government Accountability Office, U.S.
Census Bureau and the Center for Retirement Research at Boston College
find the vast majority of public sector pension plans are sound and on
track to meet their future obligations.

Said Leigh Snell, federal governmental relations representative
for the National Council on Teacher Retirement (NCTR), "We understand
that good news may not grab the headlines. But misrepresenting the
financial health and falsely eroding confidence in these systems do a
disservice to taxpayers and workers who police streets, fight fires,
educate children, and care for the sick." He added, "As a nation, we
should be examining how this cost-efficient system can be emulated to
expand retirement security for all American workers."

Signatories on the letter include the National Conference on State
Legislatures, the National Association of Counties, the National
League of Cities, and the U.S. Conference of Mayors. Employee groups
signing the letter represent the nation's teachers, firefighters,
police officers, and state, county and municipal workers.

The letter to lawmakers indicates that state and local governments
take seriously their responsibility for paying promised benefits to
their employees and retirees:

-- Comprehensive state and local laws, public accountability, and
scrutiny provide rigorous and transparent regulation of public
plans resulting in strong funding rules and levels.

-- Public pension assets are professionally managed and invested
on a long-term basis using sound investment policies.

-- On the whole, public pension funding levels and investment
performance have been found to meet or exceed those in the
private sector.

-- Public plan participants' accrued benefits and future accruals
are protected by state constitutions, statutes, or case law
that prohibits the elimination or diminution of a retirement
benefit.

Additionally, the letter explains that important distinctions
between the public and private sectors, as well as the structure and
governance of their pension plans, are often unrecognized or
misunderstood. State and local government employee pensions are
designed much like the Federal pensions provided to U.S. military and
civil service personnel, and similarly are backed by their sponsoring
governments. One important distinction, however, from Federal plans is
that State and local pension systems have pre-funded nearly 90 percent
of their future benefits. Accordingly, suggesting the application of
corporate finance measures --which are aimed at companies that can be
acquired or go out of business--is simply inappropriate.

The full text of the letter is available at www.nasra.org.

The National Association of State Retirement Administrators
(www.nasra.org) is a non-profit association whose members are the
directors of the nation's state, territorial, and largest statewide
public retirement systems. Established in 1955, NASRA's 82 members
oversee retirement systems that hold more than $2 trillion in assets
and that provide pension and other benefits to more than two-thirds of
the nation's state and local government employees.

The National Council on Teacher Retirement (www.nctr.org) is
dedicated to safeguarding the integrity of public retirement systems
in the United States and its territories to which teachers belong and
to promote the rights and benefits of the members, present or future,
of the systems. NCTR had its beginnings in 1924; became affiliated
with the National Education Association in 1937; and became an
independent association in 1971. NCTR membership includes 77 state,
territorial, local, and university pension systems. These systems
serve more than 16 million active and retired teachers, non-teaching
personnel, and other public employees, and have combined assets of
nearly $2 trillion in their trust funds.

NASRA Media
Kelly Kenneally, 202-256-1445

Copyright Business Wire 2008