As elected officials are being asked to do more with less money, and the underfunding of government pension plans has become a nationwide crisis, a team of George Mason University students has stepped in with a tool to help.
Frank Shafroth, director for Mason’s Center for State and Local Government Leadership, and his public administration master’s students from the Schar School of Policy and Government have created a guide to pension plan management to deliver to every state and local elected official in Virginia to help them better deal with the pension crisis.
“As state and local governments see an increased demand for resources coinciding with continuing retirements of baby boomers, the ability to ‘cut a little off the side’ of many government programs will become increasingly difficult,” said Shafroth. “This, coupled with underfunded pension programs, will put many state and local governments at risk.”
Competing priorities are coinciding with uncertain economic times, where projected investment returns are at an all-time low, the guide notes. The result is that government officials must make tough choices between contributions to their pension plans and other priorities.
Cities—and even countries—have already gone bankrupt because of these issues, Shafroth added.
“Dozens and dozens of Illinois municipalities failed to set aside funds to honor state constitutionally mandated pensions,” said Shafroth. “That has created a state constitutional crisis and risks hurtling countless municipal retirees into abject poverty.”
Frank Shafroth can be reached at 703-993-8560 or fshafrot@gmu.edu
For more information, contact Mary Lee Clark at 703-993-5118 or mclark35@gmu.edu