The health of Alabama’s pension system has been in the news a lot recently. Why the sudden interest in Alabama’s pensions, you might ask? Well, it has a lot to do with some familiar faces: Enron billionaire John Arnold and the Pew Research Center. In Monday’s blog post, we examined Arnold’s history of funding anti-pension efforts across the nation and the role Pew has played in promoting his anti-pension rhetoric. Alabama provides a perfect case study in their methods.
Earlier this year, the conservative Alabama state legislature formed a joint legislative committee to study Alabama’s pension system. They invited representatives from Pew to testify before the committee in August and the Pew officials, unsurprisingly, offered a dismal assessment of Alabama’s pensions. Pew, which has received almost $5 million in donations from John Arnold, has done similar work in other states, like Kentucky, testifying before committees and helping lawmakers draft legislation that dismantles traditional public pensions. The effort in Alabama has also received support from the conservative Alabama Policy Institute, which has received thousands of dollars in donations from John Arnold. Both Pew and API are helping to push a message that Alabama’s pensions are unsustainable and must be dismantled.
Instead of the falsehoods and distortions promoted by Pew and API, here are some facts about the Retirement Systems of Alabama:
- Between 2009 and now, RSA has paid out about $15 billion in benefits to its members and increased its assets by 46% to approximately $35 billion.
- RSA’s investment returns have been ranked in the top 13% of all major public pensions for the last three years and in the top 25% over the last five years.
- RSA has an unfunded liability, but no more than the average public pension fund and not at a level which poses a threat to the sustainability of the system. The causes of RSA’s underfunding are the financial collapse of 2008 and numerous expensive unfunded cost-of-living increases passed by the Legislature. RSA’s situation is like a homeowner who doesn’t have all the cash in the bank to pay off his mortgage, but instead pays it off over time. RSA has implemented a plan, which is already working, to pay off its unfunded liability.
What’s happening in Alabama follows a pattern of how conservative legislators and anti-pension ideologues like John Arnold attempt to gut pensions. Visit www.TruthAboutJohnArnold.com to see who has taken John Arnold’s tainted money in your state.