A State Financial Tornado

As if the national financial crisis wasn't enough the state is woefully underfunded in the seven state workers retirement funds, i.e. teachers, highway patrol, highway dept., ect. Economist Arnold King called it " A Bernie Madoff". Right now we are at a 60.7% funding level, in other words we have only 60% of the funds necessary to fund the pensions we have promised these workers. I heard a story on NPR this last week addressing this problem, they started by comparing Nebraska and Kansas. Two states who are geographically close, but light years apart when it comes to funding their teacher retirement funds. Nebraska uses a 401K plan where the monies are invested and have a chance to grow much faster that the rate of inflation (the only way to save enough money to retire on in my opinion) Kansas on the other hand uses the old style pension fund which basically your employer sets aside a set amount based on your wages and draws a small amount of interest. These worked back in the day before inflation overtook them, but no more. It is comparable to a company trying to do business like it did 40 years ago and trying to compete in today's market. It simply is not going to happen. If Oklahoma does not adapt a different way to handle it's retiree's funding we will simply be putting off a debt that will sooner or later have to be paid. It seems to me that the Baby Boomer generation has no problem with pushing debt upon the following generations just as long as they don't have to deal with it ( see earlier post "Financial ticking time bomb"). The Boomers have always been known as the Me Generation or for being very selfish. This follows the pattern set for the last 40 years ever since they entered this society as adults. Nobody likes taxes, but something is going to have to be done (read tax increase) because our state legislature keeps increasing benefits in the form of retirement increases with no visible funding. Our state workers deserve better than this Oklahoma and we can do better. It may take electing the right people, but that is what elections are for.