Fix state pension system

Watertown Public Opinion, South Dakota: We hope South Dakota Retirement System Board members and, if not them, the Legislature and governor look at what’s going on around the country with public pension systems and the nation’s Social Security system.

To say it’s a mess is a gross understatement. Many states and cities are on the brink of defaulting on their pension obligations to millions of retired government employees. That’s a scenario our state must avoid at all costs.

And to think that can’t happen here is hogwash — it can.

(It) looks like the SDRS fund this year could make up for all those losses from the past few years and finally get back to a balance that is in the black again.

However, there is a red flag as was discussed at the SDRS board meeting: there is a “50-50” chance the fund may not be able to keep up with the assumed 7.75 percent rate needed to keep fund balances where they are today and that, in turn, means future problems for the system.

So, what’s the solution?

Now the fund is back in the black, we would recommend the board alter the payout and investment percentages such that they can almost guarantee - with 90 percent accuracy - a solvent system for current and future payouts.

That is, of course, not good news for current retirees depending on pension payouts from SDRS. But, if we have learned anything from what’s going on across our nation, especially at the state and local level, paying too rich of a payout today could mean drastic measures up to and including insolvency.