As seen at the Columbian in Clark County, Washington:
While it is Sohn’s job to determine how much money we have, it is the actuary’s job to determine how much money is needed. The actuary helps keep the state’s public pension system fully funded and actuarially sound.
To that end, the actuary recently found that the mortality assumptions used to determine contribution rates failed to take into consideration the fact that people are living longer. He immediately recommended another $64 million in state money for the 2007-09 biennium to cover future costs.
While the $64 million is not an enormous amount when you’re talking about a $30 billion state budget, the compounding effects over a 25-year period to state and local governments are worth noting: $4.2 billion. Like the man says, “Can you hear me now?”
This is the whole reason for having a state actuary in the first place: to reveal problems while they are small and can be handled. Public and private pension systems across the nation are making headlines every day for being underfunded or failing altogether. It’s in our state’s and our state workers’ best interests to have a firm grasp on our state’s future legal and financial obligations.
But, for political reasons, the actuary’s recommendations are being ignored. And this is not the first time.
While this editorial by Senator Joe Zarelli pertains only to one pension program in the State of Washington, it’s a discussion that could well be applied in dozens of other situations around the country, all the way up to the looming deficits in the federal Social Security and Medicare programs.
It does no good to have someone work to provide advance warnings of big problems that could be easy to fix if caught early, if you’re going to ignore those warnings.