It's Overwhelming: Fundamental Flaws Doom Governmental Defined Benefit Plans

The Bloomberg BNA Tax Management Weekly State Tax Report filters through current state developments and analyzes those critical to multistate tax planning.

Government employees' defined benefit pensions are inherently flawed and cannot survive without fundamental reform, says Bob Williams, president of Alexandria, Va.-based State Budget Solutions. According to Williams, current government pension policies present a systemic risk to the U.S. economy and, even under the most optimistic scenarios, will drain money from taxpayers and decimate essential government services. He outlines the scope of the problem, and suggests that states and municipalities enact several “reality-based” solutions.