Senator David Holt Op-Ed on Pension Reform

This week, OKC Friday ran an op-ed by Senator David Holt regarding pension reform.   It can be read here:

Now is the time to address pension reform
By Senator David Holt
Though I could fill OKC Friday with the things that the Legislature should be doing, it is hard to argue that any single issue is more pressing or consequential than pension reform.
Like many government agencies and private employers around the nation, Oklahoma made promises to its state employees about retirement that have turned out to be difficult to keep. Across half a dozen pension plans that the state administers, the funding gap exceeds $11 billion. To put that into perspective, that is the equivalent of 2/3 of the state government’s total expenditures in a given year.
The shortfall has its foundations in unrealistic investment assumptions, overly generous retirement ages, and policymakers who sacrificed long term solvency to score political points.
The shortfall means that promises made to state employees in the past may not be kept, with repercussions that will harm taxpayers.
The primary solution is to transition new hires from defined benefits to defined contributions. This means that instead of promising benefits that are untethered from revenue realities, new state employees will retire on the money they place into retirement accounts. Employees will also enjoy the portability of such accounts.
This is clearly the right thing to do for the taxpayers, existing employees and future employees. And momentum is building to finally address this issue in 2014. But as with many issues, an alternate reality can take hold at the State Capitol, and the right thing can fall victim to pressure from interest groups.
State employee groups are already organizing against reforms, even though failure to reform means insolvency and broken promises. We as legislators should not bow down to such pressure. We were elected to solve problems, and the solutions to this problem have become clear. I commend Fridayland legislator Randy McDaniel for working this issue for several years now, and I stand ready to support him and the taxpayers of Oklahoma. The 2014 legislative session is the time to address pension reform, before it is too late.
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