[Congressional Record (Bound Edition), Volume 156 (2010), Part 14]
[Extensions of Remarks]
[Page 21092]
[From the U.S. Government Publishing Office, www.gpo.gov]




        THE PUBLIC EMPLOYEE PENSION TRANSPARENCY ACT (H.R. 6484)

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                            HON. DEVIN NUNES

                             of california

                    in the house of representatives

                       Tuesday, December 14, 2010

  Mr. NUNES. Madam Speaker, I rise today to discuss the Public Employee 
Pension Transparency Act, H.R. 6484, which I introduced on December 2, 
2010, with the Gentleman from Wisconsin, Mr. Ryan, and the Gentleman 
from California, Mr. Issa. This legislation is designed to enhance the 
soundness of State and local employee pension benefit plans by 
providing them the incentives necessary for State and local governments 
to provide the American people with meaningful disclosure of the value 
of these plans' assets and liabilities.
  State and local governments have promised pension benefits to about 
20 million active public employees and another seven million retirees 
and dependents. According to the states, these pension promises are 
underfunded by about $1 trillion. However, this enormous number fails 
to accurately convey the true magnitude of the cost taxpayers will bear 
to meet these obligations. Moreover, as a result of a lack of 
transparency and generous accounting standards, the vast majority of 
the American people are unaware that their State and local governments 
collectively owe trillions of dollars for generous public employee 
pension benefits.
  Unlike private pension plans, public employee pension plans are 
allowed to use unreasonably high discount rates to calculate their 
liabilities. In fact, many use unrealistic expected rates of returns on 
their plan assets, the value of which is often inflated, to discount 
their pension liabilities. Many economists maintain that these 
practices are misguided and hide the fact that State and local 
government pension plans are collectively underfunded by more than $3.8 
trillion.
  The Public Employee Pension Transparency Act would address this 
serious situation by requiring State and local government pension plans 
to disclose the true magnitude of their liabilities to the American 
people. The bill would condition the continuation of specified Federal 
tax benefits upon State and local governments' decision to file certain 
information regarding their pension plans with the Secretary of the 
Treasury. This information, which would reveal the true extent of 
public pension debt, would be available to the public through a 
searchable Web site.
  Over the course of the past several years, we have seen trillions of 
taxpayer funds spent to bailout banks, auto companies, Wall Street, 
homeowners, and others. The American people are infuriated by these 
bailouts and are insisting that they end. State and local governments, 
with their trillions of dollars in hidden public employee pension debt, 
are next in line. It is time for them to reveal the true cost of their 
pension promises and to take that action necessary including pension 
reforms--to meet their obligations. The Public Employee Pension 
Transparency Act would reaffirm that State and local pension 
obligations are solely the responsibility of those entities and 
proclaim that the Federal Government will not provide a bailout. 
Accordingly, I ask my colleagues to join with me to enact this 
legislation.

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