MINOT, N.D. — North Dakota’s public worker pension, called the Public Employees Retirement System, or PERS, has a multi-billion dollar shortfall.
These shortfalls happen routinely because defined-benefit pension plans are fundamentally flawed. Whether we’re talking about pensions for private sector union workers, or pensions for state employees, or even our national pension, Social Security, guaranteeing a benefit based on guaranteed revenues is a recipe for problems, and the only possible solutions are bailouts and reductions in benefits.
We all know that Social Security has a shortfall, yet the only proposed solutions include a bailout through taxpayer appropriations or a watering down of the benefit through means like raising the retirement age.
Don’t get me wrong, those are appropriate steps to take if we’re going to saddle ourselves with a defined-benefit pension, but if we have the opportunity, and the ability, to move ourselves to a more sustainable sort of plan, why wouldn’t we?
House Bill 1040, which has already been approved by the House of Representatives and is set for a committee hearing before Senate appropriators this week, is an expensive proposition. There are just no two ways about it.