Pension Review Board Data Is Open to Interpretation
Using the raw data from the PRB reporting spreadsheet to bolster political arguments against defined benefit plans is common practice for opponents to the current system. Take those types of reports with a grain of salt.Nationwide, the opponents to defined benefit plans use alarmist statistics based on the unfunded liabilities of pension systems to create unfounded concerns. In Texas recently we've seen the Texas Public Policy Foundation, an Austin-based research group with a political axe to grind, use a similar tactic to accomplish their goal. They want all defined benefit plans to convert to defined contribution plans like 401(k)s. Take for example a recent opinion-editorial in the Austin American-Statesman, in which a TPPF analyst cited a Texas Pension Review Board "report" that saw a $4.4 billion swing in the gap between benefits earned and plans' assets for all Texas pensions. The "report" that the analyst used was simply a spreadsheet of broad data. It was not an official determination of the PRB itself. And given a TEXPERS review of several PRB spreadsheets, it was very unclear as to what periods the analyst was comparing. Nonetheless, our review showed that $4.4 billion, while certainly a lot of money, would only be a single-digit percentage change, for comparison periods in the last year. Consider that state and local Texas pensions combine to manage more than $230 billion in retirement assets and their unfunded liabilities have ranged from $49 billion to $57 billion in the last 18 months of reports. These changes might occur because of revised actuarial assessments of workforces or new information about asset values. They are fluid situations with many variables. Using the raw data from the PRB reporting spreadsheet to bolster political arguments against defined benefit plans is common practice for opponents to the current system. Take those types of reports with a grain of salt. And, be sure to keep your elected officials up to date on the true working dynamics of your pension so that they don?t become swayed by the data cherry-picking common to the opponents of DB plans.