The Public Employee Pension Transparency Act (PEPTA) is expected to be reintroduced soon in the 114th Congress. Rep. Devin Nunes (R-Calif.) will once again lead the effort in the U.S. House of Representatives. NACo and other state and local government organizations have opposed PEPTA in past sessions of Congress because the bill would introduce three new troublesome provisions impacting state and local governments: a requirement for state and local governments to file annual reports with the U.S. Treasury Department disclosing how they calculate their unfunded pension liabilities; a requirement to use a rate of return pegged to the Treasury rate rather than rates widely used now; and the loss of the ability to issue tax-exempt municipal bonds if a state or local government fails to comply with the requirements under the bill.
On March 14, NACo, along with members of the Public Pension Network, sent a letter to the U.S. House of Representatives opposing the measure and asking Representatives not to sign on as a cosponsor. Given the changes that public pensions have implemented in the years since the Great Recession, it remains unclear why the additional reporting requirements or introduction of this new method of calculating unfunded pension liabilities is still needed. Further, tying the ability to issue tax-exempt municipal bonds to these new burdensome requirements will have a significant negative impact on how state and local governments serve the needs of constituents through infrastructure investment.
To help educate members of Congress and the Administration and address some of the concerns being raised around state and local fiscal conditions, NACo and other representatives of state and local governments recently issued the 2016 update to the Fiscal Facts Policy Brief.
NACo will continue to monitor developments and report them as they occur. While the timeline for bill introduction remains uncertain, NACo asks counties to urge their representatives not to cosponsor PEPTA and oppose its inclusion in any other legislative measures.
Contact: Mike Belarmino at firstname.lastname@example.org or at 202.942.4254.