The Free Enterprise Nation today
announced its support of the Public Employee Pension Transparency Act
(“PEPTA”), introduced by U.S. Representatives Devin Nunes (CA), Darrell Issa
(CA) and Paul Ryan (WI).

James MacDougald, President and
Founder of The Free Enterprise Nation (“FEN”) stated, “PEPTA (HR 567) is extremely
important legislation that is in the best interest of both the taxpayer and the
public sector employee. It will establish a sorely-needed enforcement mechanism
requiring public sector pension funds to disclose their real financial
liabilities.”

According to MacDougald, current
estimates of state and municipal unfunded pension liabilities range from $500
million to $3 trillion. “If the higher estimate is correct, it is quite
possible that some public sector employees might not receive the retirement
benefits that they have been promised. For example, the City of Prichard,
Alabama filed for Chapter 9 bankruptcy and stopped issuing pension checks to
city retirees who relied on them for survival. This unacceptable situation must
be prevented in other municipalities and states, and we believe that PEPTA is
an important step toward that end,” MacDougald said.

Since the organization’s
inception, FEN has studied the perilous financial conditions of many public
sector pension plans and believes that the lack of uniform and consistently
applied accounting and reporting standards for these plans has masked much of
the problem. “In the absence of those standards, neither the taxpayer nor the
public employee can be confident that they have a clear picture of a given
plan’s solvency and funding status,” according to MacDougald. “Furthermore, the
‘two-edged sword’ of the failure to achieve projected investment returns on
pension plan assets combined with decreased state and municipal tax receipts
has created a legitimate fiscal crisis for many public sector entities,”
MacDougald added.

“Simply put, the Public Employee
Pension Transparency Act will require disclosure of public sector pension
funding that is consistent with the private sector, will provide the public
sector retiree with more accurate information about their promised benefits,
and will protect the taxpayer by ensuring more responsible governance of public
pension plans,” MacDougald concluded.