by Sam Hieb
Interesting op-ed from Anna Beavon Gravely, North Carolina state director of Generation Opportunity. Never heard of it, but the gist of her article is millennials need to wake up to the fact that promises made by government aren’t necessarily kept—specifically speaking–Social Security and state-funded pensions:
If federal and state-run retirement programs aren’t helping, what options do millennials have to prepare for the future? Quite a few, actually. Unlike generations before us, we can access retirement and investment resources with just a few mouse clicks.
My generation doesn’t need more government “assistance” to prepare for retirement. We have different goals and expectations than previous generations. We start saving approximately 13 years earlier than older generations did, while more than half of us have set financial goals, compared with less than 40 percent of older generations.
We can’t count on Social Security — or anything like it — to help us meet those goals. It’s costing us too much already. So, when politicians promise to expand Social Security or create new state retirement programs, they may be saying what some generations want to hear. Millennials, however, shouldn’t buy what they’re selling.
Turns out JLF chair John Hood addresses the same issue here in North Carolina–and its possible effect on the state’s treasurer race:
So, with regard to the pensions, North Carolina has used tax dollars, employee contributions, and investment returns to build up a portfolio of assets with a market value approaching $90 billion. Unfortunately, nothing comparable has been done to accumulate assets to offset the state’s liability to pay retiree health benefits. Virtually that entire liability is unfunded. And I’m told that, according to a new state estimate, it is now approximately $33.5 billion, up from a $26.6 billion valuation last year.
There’s still more bad news. That pension fund of $90 billion comes close to funding North Carolina’s pension liabilities in theory. But the theory the state has been using — that the pension fund will realize a long-term average rate of return of 7.25 percent on its assets — appears to be far removed from reality.
…..If you don’t work for government, perhaps you don’t think these matters don’t affect you. You are mistaken. If North Carolina’s next state treasurer, legislature, and other officials don’t take immediate action on these unfunded liabilities, you’ll be among those stuck with a larger bill in the future — in the form of higher taxes and fewer government services.
The stakes here are massive. Alas, the media coverage is puny.
Regarding this issue and millennials—-Democratic nominee Hillary Clinton already has issues with the younger crowd— and I would think the issue of grossly underfunded government liabilities doesn’t help. But who’s paying attention? As Cmdr. Hood accurate;y points out, it’s not exactly a “trending topic” on social media.