The $8.4 billion state Employees Retirement System shortfall has more dire implications than most realize.
This ERS failure affects everyone in the state and counties — not only retirees. The almost inevitable consequences of the killer shortfall will include a continued raising of the minimum retirement age, more decreased pensions (especially for younger workers), more increases in employee contributions and more taxpayer money (employer share) needed to support the ERS.
Ultimately, there may even be an ERS bailout funded by Hawaii taxpayers. What all this translates to is billions of dollars crippling the Hawaii economy.
The worst-case scenario is the ERS depleting principal to pay pensions (and having less and less to invest) and ultimately not being able to pay retirees their pensions.
The mindboggling fact is all the state and county retirees — for the next 30 years — will be depending upon a pension system that is not fully funded — even under favorable conditions.
Basically, one of the stated conditions needed to fix the ERS is to average a 7.75 percent rate of return for the next 30 years, which is unlikely considering the average ERS return for the past 10 years has only been 2.8 percent. If they really think they can — all of sudden — much more than double their average rate of return, then why didn’t the state do so years ago?
Additionally, the future investment environment as a whole is not very good because the U.S. economy is handicapped and will be crippled by the massive federal debt problem that continues to grow.
The $8.4 billion shortfall is a whopping 70 percent of total assets and the ERS is ranked near the bottom of all 50 states.
Our elected officials made the problem worse by raiding the fund in the past. There were years of early warning that the ERS was in trouble.
Ultimately, it comes down to that nobody was minding the store. If you listen carefully, the captain of the U.S.S. Titanic Hawaii is saying, “Brace for impact.”
Start with the truth
Calling an illegal alien an “undocumented immigrant” is as offensive as calling a rapist an “underloved romantic.”
Those who commit illegal acts are criminals, not paperwork victims. No matter where you want to take the debate over allowing millions of foreigners to take up residence in the U.S., start with the truth, not spin-phrases. Otherwise, why not call thieves “asset redistributors,” hit-and-run drivers could be “excitable motorists,” arsonists merely “pyro-technicians.”
Start with the truth. We are a country of laws. There are lawful methods of immigration. Those who circumvented our laws are here illegally. “Illegal aliens” works for me.