Dennis Leone: The bottom line

From Dennis Leone, January 25, 2011

Here is the bottom line: The board soon will adopt a plan that will show solvency ON PAPER for the required 30-year unfunded liability period, BUT no one will really know that it will be based on the HOPE that the 4 charts (see the end of my report) somehow will get better on their own. It isn't going to happen, and there will be plenty of hacked-off lawmakers a few years from now when they see it for themselves.

Is it fixable? Yes, but it would require the board to eliminate future COLA payments for ALL new retirees (which currently are 175,000 active members).

Will the board do it? No. Tell me, did any of us even know that we were going to get a COLA until we retired or until we were nearly retired. Active members, for the most part, don't even know that they will get a COLA. A decision to stop it would be stopping something the vast majority of actives don't even know is there.

Dennis Leone