The State of Indiana is now showing ALL pension debt thanks to a new accounting rule passed on local municipalities and states in 2012. No more of hiding unfunded debts in “footnotes” at the bottom of audit reports. This will irk career government accountants who like to use complicated math formulas to further their careers. If government officials want to preach “transparency”, then this is ethics reform they must accept.
Here is more from JournalGazette.net:
As a result of the new rule, Indiana’s reported pension debt increased from $1.1 billion in 2014 to $11.9 billion in Indiana’s 2015 comprehensive annual financial report.
Sheila Weinberg, founder and CEO of TIA, also said the state is using outdated pension numbers and the actual pension debt is $13.5 billion. In addition, state officials are also hiding $651.5 million of retiree health care debt off the state’s balance sheet, the group claims.
She said it’s positive that Indiana’s unfunded retiree health care costs are so low.
Weinberg said Indiana does has assets it could transfer to pay some of the liabilities. Counting those, the state’s overall financial condition is only $4.9 billion in debt.
The State Auditor’s Office, which prepares the annual financial report, said nothing is being hidden at all. Prior to 2015, accounting rules required states to report their net pension obligations on the balance sheet of their financial statements, while disclosing the funded status and funding progress for each plan separately within the footnotes of the financial statements.
Indiana is in good shape compared to many other states. Not only does money need to moved over to these pension areas for a little more stability, but policy change needs adapted in getting off the pension system all together.
Whether this happens remains to be seen.