RALEIGH, (SGRToday.com) - Seven state and local government associations have issued a draft “Pension Funding Policy Guidelines” for state and local governments, according to the National Governors Association. The document comes in the wake of new governmental accounting standards that focus on how state and local governments should account for pension benefit costs.
The guidelines include the following recommendations. The full report can be found at www.nga.org.
- Ensure pension funding plans are based on actuarially determined contributions
- Build funding discipline into the policy to ensure promised benefits can be paid
- Maintain intergenerational equity so the cost of employee benefits is paid by the generation of taxpayers who receives services
- Make employer costs a consistent percentage of payroll
- Require clear reporting to show how and when pension plans will be adequately funded
“The last decade has been a sobering time for government leaders and pension plan sponsors. Actuarial practice is continuously evolving,” said Dan Crippen, National Governors Association executive director in a news release. “Planning for the long-term is essential. These draft guidelines can provide a framework for policymakers to update their pension funding policies.”
Members of the seven groups include the National Governors Association, the National Conference of State Legislatures, The Council of State Governments, the National Association of Counties, the National League of Cities, the U.S. Conference of Mayors and the International City/County Management Association.