Bailey’s work on state pensions highlights fiscal responsibility

New report shows $3.4 trillion hole in public pensions nation-wide

Sen. Barbara Bailey, R-Oak Harbor, has served on the state’s Select Committee on Pension Policy for over a decade. In that time Bailey has worked to ensure the health of the state’s pension systems. Those efforts have paid dividends, especially in light of a recent research reported in the Financial Times that the “US faces ‘disastrous’ $3.4 trillion pension funding hole.”

“Making sure that we make good on our commitments to public employees is critical,” said Bailey. “Too many states are hiding long-term costs in order to look good in the short term. That’s unacceptable and hurts future generations as well as retirees. I’m glad I’ve been able to improve the solvency of our state’s pension policy.”

A 2015 report from the Wall Street Journal ranks Washington third in the nation for funded status of public pensions, and according to 2011 estimates by Governing magazine, Washington ranks highly in the funded status of public pensions and per capita liability. This stands in contrast to the new findings in the Financial Times that public pensions “will pile pressure on cities and states to cut spending or raise taxes to avoid Detroit-style bankruptcies.”

“I remember tough budget years where many proposed skipping payments to our state’s pensions,” Bailey said. “Those were unwise decisions and I fought to ensure we made the investments for our public employees and taxpayers. The results of missing payments means a larger burden down the line, forcing cuts or higher taxes to pay for the unfunded liability. Our state’s foresight and fiscal responsibility will help keep these funds strong.”

Authors of the study point to unrealistic expected returns and a gap in funding related to actual costs as contributing factors to the funding hole. “Responsible reforms and paying what’s due has kept us on the right track,” Bailey added. “I will continue to push for policies that keep Washington’s pensions in the black.”