At the last Enrolled Actuaries meeting there was a session on public plans where the suggestion was made that pension actuaries in New Jersey should get more involved and speak out. I disagreed and recommended an ERISA-type law for public plans. Here’s how that played out:
Apparently most public plan actuaries do not feel there is a need for outside funding rules for governmental plans. They may have a point. Federal oversight of private-sector plans has not eliminated defaults or stemmed deficits.
However, what those rules have done is create benchmarks. No plan sponsor would be able to trick the public into believing that the funding problem is really an investment-return issue or that pathetically weak ‘reforms’ affecting only new-hires will solve anything. Those states that do make their required contributions will look better to participants, taxpayers, and bondbuyers while the New Jerseys will be exposed (to more than only pension actuaries).