Comments about ‘Dan Liljenquist: Audit of state retirement system was important’

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Published: Thursday, March 7 2013 12:00 a.m. MST

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John C. C.
Payson, UT

I agree. Thank you, Frugal Dougall. This audit was a much-needed insight into the serious consequences of our assumptions.

Dan Liljenquist's statement, "The Legislature should enable URS to lower its return assumptions by increasing pension contributions above what is currently requested." carries a hidden assumption. He should have continued, "then they could again offer defined benefit retirements to state employees."

He had assumed that lost benefits cannot, should not, or will not ever be restored.

Scott12345
Salt Lake City, UT

What is commendable about the audit and this article is that it's focusing on funding future pension liabilites (debt) by setting aside more money now.

What is funny about this recommendation, and most of this article, is that anyone who knows anything about defined benefit pension plans and their financial statements already knows that the assumed rate of return is a huge guess / assumption. Kudos to UPR for using 7.5% in the first place, instead of a higher rate. Will they actually achieve that rate of return over the next 30 years? If you know the answer to that question, then you're richer than Warren Buffett.

And John C.C. - defined benefit plans are dead. This is the case for the whole nation. When they were originally offered, they were affordable to companies / governments, and assumed that life spans would not dramatically increase, and that the cost of medical care would not drastically increase. How'd that work out? How many pension plan defaults have occurred?

I'm 38, and I would love to have a defined benefit plan. However, not going to happen. So if you're older than I and lucky enough to have one, enjoy.

Swiss
Price, Utah

I hope he is correct because my wife should be able to support in the manner to which I wish to become accustomed.;)

Cato the Elder
Salt Lake City, Utah

URS made back the entire investment loss from 2008 back in just three years. Sen. Liljenquist predicted it would take decades. Quibbling about whether 7.5% or 7.0% is the right investment assumption is silly.

Joe Schmoe
Orem, UT

Seriously, this state has the best retirement system around. Now thanks to Liljenquist, the public employees have no guaranteed retirement. Most public employees (teachers, police, etc.) take the lower pay knowing that they will at least be able to have livable retirement. Not any more. I am already seeing almost no men going into teaching thanks to that little gaff.

URS is in great shape. In fact I predict that it will have MORE money than it needs in the future. Not many are making it for 30 years as a teacher yet money is being put into the system for those that were hired before 2011. What happens to the retirement money put into the system when the teacher quits after 10 years? That is right, it stays in the system and the employee sees NONE of it.

Plus the legislature in their infinite wisdom removed the 70% cap teachers could get if they worked for 35 years. Now the few that hang on can actually work 40 years and get 80% in retirement. Nice move guys.

Just leave the retirement fund along and go work on building more roads. It seems that is what you do best.

Orem Parent
Orem, UT

So Dan, is what Cato says in his post true? Has the URS already made back the money it lost in 2008? If so, when do you propose restoring the one benefit left to public employees? Retirement was the only thing keeping many people in those professions. Can someone admit when they are wrong?

AllSeeingEye
Salt Lake City, UT

The Utah Constitution says nothing about the auditor doing "preformance" audits. It mentions only "financial" audits. There may not be a big difference when a "performance" audit is of a program that involves only money. But, it will make a big difference in many other contexts when a "performance" audit is aimed a program that has little to do with money.

Audits are often used to target a manager or program someone in power deems politically inappropriate, for whatever reason. Having the State Auditor be the "overseer-in-chief" simply upsets the checks and balances the Constitution intends between the different branches of government. It's a bad idea. Utah citizens will likely regret the result.

Cameron
Eagle Mountain, UT

No, the pension losses haven't been made up already. Not only have they not been made up, but there's a high chance we still don't have enough funds to cover the defined benefit promises we've made.

Public employees hired after 2011 have a 401k style plan that has a *much* higher employer contribution rate than the private sector does. In fact, many if not most private companies don't even offer any employer contributions any more.

As for not quibbling over small changes in growth rates, I'd suggest going to a reputable retirement planning website and play with those numbers. I know when I plan for my own retirement even small changes in the rate of return make a big difference.

Orem Parent
Orem, UT

Cameron can you link me to some numbers supporting your claim? I ask because everything I can find does indeed indicate the losses have already been made up and the fund is very healthy.

Cameron
Eagle Mountain, UT

Orem Parent, I can't put links in a comment. But last summer-ish this newspaper reported the findings of two BYU economists who studied the fund and found areas of concern.

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