Fixing complex problems requires comprehensive approaches, collaboration, patience, and people dedicated to finding realistic solutions. The Pension Integrity Project at Reason Foundation embodies these characteristics.  

Founded in 2013, the Pension Integrity Project, a grantee of Stand Together Trust, is tackling one of the biggest fiscal issues states face today — pension plans. Pension liabilities (pensions promised without sufficient funds to deliver) have skyrocketed to over $1 trillion dollars due to underperforming investments, contribution shortfalls, and incorrect economic assumptions. More than just promoting fiscal responsibility, the Pension Reform Integrity Project team wants to help states uphold their commitments to government workers while eliminating the financial risks that have driven up costs and impacted the quality of public services for taxpayers. 

The Reason team — which blends financial policy experts and quantitative analysts — has provided technical assistance to improve reforms covering dozens of pension systems across 11 states over the last decade, creating customized plans to pay down the liabilities and technical solutions to reform the pension program. Their work not only ensures that government workers will still receive their promised — and constitutionally protected — retirement funds; it also aims to protect taxpayers from having to ultimately cover pension shortfalls through higher taxes, reduced government services (like road repairs and public safety), or both. 

Now, another state will reap the benefits of the Pension Integrity Project efforts. In April 2023, North Dakota Gov. Doug Burgum signed into law a major reform that will pay off nearly $2 billion in pension debt and set the state’s benefit plan on a path to financial solvency by placing newly hired workers into a new, risk-managed retirement system designed to avoid the type of unfunded liability accrual that has been so difficult for governments to manage nationwide.   

Leonard Gilroy, Vice President of the Pension Integrity Project, and Ryan Frost, Senior Policy Analyst for the project, shared the details of their work for North Dakota:

“Prior to North Dakota’s 2023 legislative session, Reason Foundation operated as pro-bono technical assistants for a state interim retirement committee created under House Bill 1209 during the 2021 legislative session. The committee was charged with studying how to effectively close the current NDPERS defined benefit system and move to an alternative pension plan design. The Pension Integrity Project built an actuarial model for NDPERS to forecast projected costs and risks under a variety of scenarios and made four presentations to the interim committee, detailing our views on effective plan design, transition costs, and benefit modeling. We also provided input and language for the final bill passed by the interim committee. 

“During the legislative session, we served as technical advisors throughout the legislature’s deliberations on HB 1040, publishing multiple one-pagers explaining the bill, producing scorecards comparing the current offerings to our best practices, and presenting in-person testimony for both the House and Senate’s relevant policy committees. We also presented to both the House and Senate majority caucuses to answer questions about costs and policy considerations. 

“While many states have failed to take sufficient action to correct the structural flaws in their retirement plans that has created billions in pension debt, this year North Dakota’s leaders accomplished the rare feat of taking bold action to solve a looming, long-term financial problem,” Reason’s Gilroy told STT. “They took a pension system on an unsustainable trajectory and put it on a path to being fully paid off in the next two decades, which will save taxpayers billions in avoided interest costs over time. And at the same time, instead of offering one of the least generous retirement benefits in the nation, North Dakota will soon be offering new state and local government employees a more competitive retirement plan that will allow future employees to save more for retirement. This reform is a classic win-win for public servants and taxpayers alike.”   

To learn more about the pro-bono work of the Pension Integrity Project, visit https://reason.org/pension-reform/  or Reason Foundation and Pension Integrity Project lead state and local governments toward fiscal responsibility  previously published by Stand Together Trust. 

For more on Stand Together’s work on Economic Progress visit this link.