Posted: October 29, 2009
Concern is mounting in Washington state over the health of the
public employee pension system. The state actuary has warned of a
scenario where the two oldest retirement plans could run out of
money by 2017. Even so, majority Democrats today rejected a key
recommendation from the actuary. Olympia Correspondent Austin
Jenkins has details.
Matt Smith has the daunting responsibility of advising the Washington
legislature on how to keep the state’s nine pension plans solvent. So
when Smith talks, lawmakers listen. Or do they? Twice now Smith
has recommended lowering the assumed rate of return on invested
pension funds from the current eight percent average. But both
times majority Democrats on Washington’s Pension Funding Council
have rejected that advice. Smith is diplomatic in his
disappointment.
Smith: “We believe that there is more than a 50 percent chance
that they will not be able to achieve an eight percent rate of
return. So if that is true then the systems will have higher costs
down the road, the systems will become slightly less healthy going
forward.”
Democrats say they trust the Washington State Investment Board’s
track record of getting eight percent or better returns in the stock
market. Minority Republicans respond that Democrats are making an
irresponsible bet that could ultimately cost taxpayers a lot of
money.
Copyright 2009 KUOW