President Obama has spent the last eight years governing by executive order and administrative rule. President Trump—aided by a Republican Congress—will have the capacity to dismantle some of the worst of these actions. One Department of Labor ruling especially ripe for scrutiny exempts states from federal regulations on private pensions. It thus allows the states—already responsible for massive problems with government-worker pensions—to begin offering retirement plans to private-sector workers. It’s a disaster waiting to happen.
State and local governments have already racked up at least $1.5 trillion in debt in their public-worker pension funds through irresponsible funding practices, including promising benefits that were never funded and engaging in questionable accounting practices. This mess has developed free from federal regulation because state-worker pension plans are exempt from the strict standards of the Employee Retirement Income Security Act, which imposes stringent accounting standards on private pension plans and makes overseers of such plans liable for mismanaging them.
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