For years, the Reason Foundation has been determined to close public pension systems around the country. This legislative session, the North Dakota Public Employees Retirement System is their target.
The Reason for Reason
The anything but reasonable think-tank is a prominent national libertarian advocacy organization. Their work covers a wide range of public policy issues, including pension reform. The Reason Foundation seeks to wipe out public pensions–often mispresenting facts about public plans to make them seem volatile and unsustainable. NPPC has written multiple blogs and published videos in an effort to alert taxpayers, public employees, and legislatures about the dirty work of Reason Foundation and their vendetta against pensions.
Here’s the Situation in North Dakota
This legislative session, lawmakers in North Dakota introduced HB 1040–a bill that seeks to replace the existing North Dakota Public Employees Retirement System’s (NDPERS) defined-benefit pension plan for with a less secure defined-contribution plan by 2025, and Reason has been all over it.
The Reason Foundation is notoriously known for its tired game of digging up unfunded liabilities in an effort to dismantle public pension systems by scaring lawmakers into thinking switching plans is more fiscally responsible. Last month, Reason testified that the North Dakota Public Employees Retirement System (NDPERS) has $1.8 billion in unfunded liabilities. However, while Reason prattled on about how switching future public employees to a defined-contribution plan, they failed to mention that HB 1040 would cost taxpayers $5.5 billion over the next 20 years. Not only would it be fiscally irresponsible for lawmakers to put a strain on taxpayers’ pockets, but it would also hurt the recruitment and recruitment efforts of the state’s public sector. Defined-benefit retirement plans are a valuable recruitment and retention tool for public employees. Dismantling the system could cause irreparable damage to North Dakota’s ability to retain qualified essential employees, contributing to the already alarming number of vacancies across the country.
Reason’s Work in Other States
Just last year, the Reason Foundation testified in favor of Kansas’s SB 553–a bill similar to HB 1040 that sought to move public employees hired after July 1, 2024, into a defined-contribution plan and strip them from access to a pension through the Kansas Public Employees Retirement System (KPERS). SB 553 would have cost taxpayers in Kansas $6.7 billion. Thankfully the bill did not advance last session.
The think tank also has paid advocates on the ground in states like Arizona, Colorado, and Michigan attempting to eliminate pensions for public employees.
Previous work includes:
- In 2017, Kentucky Governor Matt Bevin sought to make harsh cuts to public pensions. When actively promoting extreme anti-pension legislation, his office relied on two biased Reason Foundation analyses to argue that there would be no transition costs associated with switching to a defined-contribution system.
- Reason has offered to conduct a similar analysis of public pensions in states like Iowa. They also often put out sky-is-falling reports exciting the unfunded liabilities of state retirement systems.
- In South Carolina, Reason has testified before the state legislature in favor of forcing public employees into a 401(k)-style system. They also hired a lobbyist to push their agenda in the state.
HB 1040 is not a fiscally responsible decision for North Dakota and would cost taxpayers billions of dollars. If lawmakers wanted what’s best for the state and taxpayers, they would look at the facts and say no to converting public employees to a defined-contribution plan.
