Saturday, August 03, 2013

Moody's places some local, state employee pension funds under review; Conservative group in Minnesota weighs in

When I lived in Minneapolis from 1997 to 2003, I sometimes went to seminars or luncheons held downtown by the conservative-to-libertarian group Center for he American Experiment, run by Mitchell B. Pearlstein and Katherine A. Kersten.   Speaker ranged from John Stossel (libertarian-oriented ABC 20-20- reporter at the time) to Cato Institute policy researchers (David Boaz once, if I recall right).
   
Sometimes the writings could take on a socially conservative side, as with the 2000 essay anthology book by the couple, “Close to Home: Celebrations and Critiques of America’s Experiment I Freedom”, where Kersten, in one essay (“Textbooks Push the Needs of ‘Self’ ove Marriage”) criticizes a hyper-individualistic outlook on life that disregards the importance of learning to take care of other people (before being married with kids, or not).  I recall the coined term, “self-date”. In more recent years, some libertarian writers like Charles Murray have noted a gradual erosion of "social capital" and the effect this can have on the needy.
    
In fact, that point certainly translates into today’s concerns about eldercare, aging population, lower birthrate, and filial responsibility.

A recent policy article by the group points out that in many states (in their case, Minnesota, particularly the city of Minneapolis or Hennepin County), taxpayers have to pay more and face higher interest rates (or their local governments face them with bonds) because accounting for pension funds for public employees was not done properly in the past.  The link is here.
     
The article does favor the practice by employers (public and private) to convert employees over to defined contribution plans (from defined benefit plans) in the way of various 401(k)’s and annuity products. 
  
The article also mentions Virginia (the entire Commonwealth) as having problems, as well as over twenty local or state systems, “under review” by Moody’s.


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