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

Daily Tax Report: State provides authoritative coverage of state and local tax developments across the 50 U.S. states and the District of Columbia, tracking legislative and regulatory updates,...

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.