For Immediate Release

Utah Receives Award for Innovative Budget and Pension Policy
State Government and Senate Leader recognized for innovation

ALEXANDRIA, VA. -  State Budget Solutions, the nation's top state budget education and watchdog group, presented the "Reality Check" award to the state of Utah for its innovative use of a "reality based budgeting" process for state pensions that makes the state more fiscally responsible and financially sound.  The award was presented on a Thursday conference call with media and policy leaders.  Utah state employees now have incentive to choose a defined contribution pension plan instead of a defined benefit plan, a reform that cuts the state's $6.5 billion pension debt in half.

On the call with State Budget Solutions President Bob Williams was State Senator Dan Liljenquist. Mr. Williams explained to the callers, "If [Washington State] had to use the same accounting system as the private sector... rather than $4.7 billion, the state's liability is $50.6 billion."  

Senator Liljenquist went into more depth concerning the pension issue: in 2008 with just one year of bad market returns put a 30% hole in Utah's pension fund.  To cover that liability it would take 10% of the general funds over 25 years, which, according to Senator Liljenquist, "means that there are 8,000 school teachers that we will not be able to afford to put into classrooms in Utah for the next 25 years."

In response to one question, Senator Liljenquist explained how Utah has tried to fix the issue of pension liability: "Cap the liability and work it out over time. It's kind of like a chemical spill, you cap the spill and figure out how to clean it up. That's what we've done here."  The Senator also explained jokingly that "the first item of pension reform is to pray, to pray that we hit our required rates of return."

State Budget Solutions awarded Utah State Senator Dan Liljenquist the "Real Leader Award" for his successful efforts in spearheading the shift toward a defined contribution pension plan.  He has created a framework for long-term stability and the "Real Leader Award" recognizes his tremendous efforts that have produced great results.  The Senator said over a dozen other states are hoping to model Utah's pension legislation.

For further information, please contact the communications team by email media@statebudgetsolutions.org or call (414) 465-2225.

 Utah Conference Call Audio

Filed Under : Pensions