Actuaries and Actualities

The New York Times opened a story this morning with a truism.

"By firing its actuarial consultant last week, the New York State Legislature shone a light on one of the public sector’s deepest secrets: All across the country, states and local governments are promising benefits to public workers on the basis of numbers that make little economic sense." The story goes on to say that either the benefits have to be reduced or programs funded from tax dollars will have to be reduced.

But is anyone but the public employee unions (who want to exacerbate the problems or sweep them under the table) listening? The Times (BTW) does a good job at explaining this complex issue which could develop into an even bigger problem. The cause, GASB (the Government Accounting Standards Board) required public agencies to use the same rules on accounting for future liabilities that private firms have had to use.