Thursday, March 28, 2024
Hawai'i Free Press

Current Articles | Archives

Friday, January 6, 2017
State pension debt will likely get worse
By Grassroot Institute @ 7:53 PM :: 4719 Views :: Hawaii State Government, Hawaii Statistics

State pension debt will likely get worse

State pension debt will likely get worse

by Joe Kent Grassroot Institute, Jan 6, 2017

Hawaii’s government owes $8 billion to the public pension system for state workers’ retirement plans. If the state doesn’t pay that money to the Employee Retirement System (ERS), taxpayers may be in serious trouble.

That’s not even including the money owed for other post employment benefits. That debt is over $11 billion.

However, the pension problem might get even worse soon because of lower stock market returns.

When stock market returns go down, the $8 billion dollar unfunded liability goes up, and that means the problem gets even worse.

This year, the retirement system predicts lower stock market returns than usual. Instead of hoping for investment returns of 8 percent, the ERS is hoping for returns of only 7 percent.

This may not seem like a big change, but when dealing with billions of dollars, it’s enormous.

But the problem gets even worse as the public pension fund reported a negative 1 percent return last June.

At a recent budget hearing at the legislature, Representative Sylvia Luke said, “That is really, really pathetic.”

Luke noted that a negative return actually adds to the unfunded liability, and makes the $8 billion debt grow even higher.

In addition, longer life-spans can also add to pension cost calculations, and this could add even more to the debt.

As you can see below, Hawaii citizens live longer on average than any other state in the nation.

Longer life spans mean more money owed to government retirees. As ERS Director Thom Williams told the Star-Advertiser recently, “Our membership is living longer on average than many of our mainland peers . . . Our membership will live two to three years longer, which means we’ll have to pay our members benefits for that additional period of time.”

Finally, Hawaii’s government has less money than expected this year, because tax revenues have been $300 million less than expected.

When money is tight, debt problems eat into public services. Hawaii’s pension problems could take away from money for government services like housing, homelessness, education and building repair.

Taxpayers and government leaders must watch the budget closely, to ensure that wasteful spending is kept in check. This will ensure that state retirees will be financially secure without relying on taxpayers and young people who are already struggling to save for their own retirement.

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

Aloha Pregnancy Care Center

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

HIEC.Coop

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Moms for Liberty

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

July 4 in Hawaii

Kakaako Cares

Keep Hawaii's Heroes

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

MentalIllnessPolicy.org

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

NFIB Hawaii News

No GMO Means No Aloha

Not Dead Yet, Hawaii

NRA-ILA Hawaii

Oahu Alternative Transport

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

ReRoute the Rail

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

School Choice in Hawaii

SenatorFong.com

Sink the Jones Act

Statehood for Guam

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT