Can COVID Funds Bailout ND Public Retirement Plans?
It seems that North Dakota's Public Employee Retirement plan is desperately underfunded. Underfunded to the tune of $1.4 billion. It's a huge number that's bound to just keep getting bigger. If you like your facts to be dense and filled with charts and graphs, then by all means make yourself comfortable and click here for a barrage of data.
So what to do?
Senator Tim Mathern (D-Fargo) had this suggestion his colleagues in the Senate shot down...
the state to increase its contributions to the PERS plan by one percent, with the employee contribution also upped by one percent.
So the big unfunded liability also comes with other consequences including affecting North Dakota's bond rating. It's tough to buy nice stuff with bad credit.
So what about dipping into the Legacy Fund? It's a rainy day fund flush with sweet cash just waiting for political interests from across the state to earmark for infrastructure and probably more than a few pet projects. But that's like dipping into a savings account held by all North Dakotans to fund the retirement funds of only State employees. The Legacy Fund money is supposed to be used on stuff we ALL want- like reliable roads and bridges.
The biggest proposed use of the earnings this session is to pay for bonds that would be used mainly on infrastructure projects. That proposal was not the result of the work by the Legacy Fund committee, said Senate Majority Leader Rich Wardner, who initially pitched the $1.1 billion proposal that has since been whittled to $680 million and still needs approval from both chambers of the Legislature.
It's good their not randomly raiding the pantry, but ND PERS does need help, sooner rather than later. So how about some COVID cash? Sen. Nicole Poolman (R-Bismarck), says
"We don't know if that will still be an allowable expense or investment for states to utilize," Poolman said. "But it's definitely a discussion in the hallways, that it could be a good one-time use for that."
Ah, the Federal COVID Relief Package. It's still pending in Congress, but might it be wise to direct that cash into shoring up our State Employee Retirement Plan. After all a significant portion of the last COVID relief package went to support the oil fracking industry in North Dakota.
What are your fracking thoughts about all this?
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