Earlier this month, the executive directors of the Big Seven state and local associations released a draft of “Pension Funding Policy Guidelines” for state and local governments. The Governmental Accounting Standards Board (GASB) recently issued new standards that focus on how state and local governments should calculate annual required contribution (ARC). The Big Seven associations are dedicated to developing the following policy guidelines:
- 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; and
- Require clear reporting to show how and when pension plans will be adequately funded.
For more information on these draft guidelines, please visit NLC.org.