Inside Opinion

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Tag: public pensions


Lawmakers must ensure state pension sustainability

This editorial will appear in Wednesday’s print edition.

All over the country, pension systems for public workers are in trouble. Many are woefully underfunded. Nationally the deficit was $1 trillion at the end of 2008, and it’s been widening since as baby boom workers retired in growing numbers and the recession battered investment funds.

Washington is in better shape than most states. As of 2008, according to the Pew Center on the States, it was one of only four states whose pension systems were fully funded.

But, according to Pew, “Washington needs to improve how it manages its long-term liabilities for both pensions and retiree health care and other benefits. The state has failed to meet its actuarially required contributions since 2001.”
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Pension gainsharing still haunts state lawmakers

This editorial will appear in Thursday’s print edition.

Washington’s ill-fated attempt to share market gains with some public employee pension plan members is back to bite the state budget again.

If a King County judge’s ruling stands, the state could be forced to restore gainsharing, putting a further burden on an already underfunded retirement system.

Budget writers are struggling to find the money just to pay down a $6 billion unfunded liability in two of the state’s oldest pensions. The restoration of gainsharing could add $1.6 billion to the tab over the long term.

Lawmakers have no one but themselves – and their predecessors – to blame.

They once envisioned gainsharing as a no-cost way to share extraordinary returns with state workers, but failed to appreciate how much the pension system relies on using those gains to hold taxpayers harmless during the down years.

Gainsharing passed in 1998, back when the market was flying high and no one could conceive of returns falling below the 8 percent needed to keep the pension system stable.

But then the dot-com bust hit, with 9/11 shortly following. Suddenly, the state budget was on the hook for covering losses that otherwise would have been absorbed by surpluses from prior years.

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Put kibosh on higher education double-dipping

This editorial will appear in Thursday’s print edition.

For some state workers, the promise of a generous pension just isn’t enough. They also want to start collecting it while they’re still working.

The Seattle Times found that 2,000 people collect both wages and retirement pay from the state. Fifty-eight of those were rehired into full-time positions within three months of their retirement, the majority in higher education. The vice president for business and finance at Washington State University, for example, collects an extra $105,000 on top of his already cool $304,000 salary.

State law prohibits workers from collecting a pension if they left with the understanding that they would be hired back. But often these deals are done with a wink and a nod.

WSU’s emergency management coordinator continued to answer work e-mails and requests for assistance during his “retirement.” Chris Tapfer’s bosses rehired him without so much as advertising his position, and he returned to work a few days after the minimum retirement period of one month. A colleague ribbed him in an e-mail, asking “What took so long?”

Defenders of double-dipping say the practice allows employers to keep in-demand executives, avoid the expense of hiring and training someone new, and reward dedicated employees with the ability to collect what’s due them.

But retire-rehires also amount to a sanctioned milking of the retirement system – and taxpayers. Many of these “retirees” are drawing benefits from a pension system that’s already $4 billion in the red.

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