From: Jonathan Williams
To: Dean Sanpei,
Subject: New Pension Reform Publication Highlights The Utah Model
Date: Wed Aug 21 20:52:43 MDT 2013


Dear Friends,


In case you missed it… ALEC’s Center for State Fiscal Reform recently published a resource tailored for legislators navigating the difficult waters of unfunded liabilities and public pension reform. Authored by Utah’s own Dan Liljenquist, Keeping the Promise: State Solutions to Government Pension Reform provides legislators and policy experts with solid principles for pension reform based on past successes in the states. 


Utah is a great example for how states can address this difficult problem. Last week, ALEC’s Ben Wilterdink highlighted Utah’s successful reform efforts on our blog:


The Utah Pension Reform Model


At a time when nearly all state government pension funds are suffering from severe underfunding, there are a few bright spots that stand out. Utah is one such bright spot in a sea of debt. Utah’s lawmakers saw the unfunded liability problem in the state pension system for what it was, a recipe for broken promises and bankruptcy. Before the 2008 financial downturn, Utah’s pension system was the best funded pension system in the nation. After the 2008 downturn, Utah’s pension fund lost 22 percent of its value in just that one year. That’s when they decided to act.


To address this problem, Utah boldly implemented serious pension reform. The state now offers a 401(k) style defined contribution plan to new state employees while contributing 10 percent of salary to their pension accounts (12 percent for public safety workers). The reform means that the unfunded liabilities resulting from a defined-benefit pension plan (now capped at 10 percent for those that still choose to opt into it) will be dramatically reduced and state employees will be protected from the legislature raiding the pension funds or not contributing appropriately. This reform protects state workers and taxpayers from the intense pressure of growing unfunded pension liabilities in the state budget.


The architect of the Utah pension reform plan was State Senator Dan Liljenquist. His experience with Utah’s pension system led him to investigate other state pension systems around the country. Unsurprisingly, Utah was not the only state to face the problem of massive unfunded pension liabilities. In an attempt to address the problem and allow lawmakers from other states to observe what happened in Utah and use the reforms as a model to fix their own pension systems, Sen. Liljenquist partnered with the American Legislative Exchange Council to release our latest publication: Keeping the Promise: State Solutions for Government Pension Reform.


The report outlines the size and scope of the unfunded pension liability problem nationwide and offers lawmakers solutions on how they can restore confidence in dangerously underfunded public retirement funds. Visit to download a free PDF of the report and start looking into how your state can save public pension systems and taxpayers.


As always, please feel free to reach out to me at any time to discuss pro-growth tax and fiscal policy or for more information. The PDF version of Keeping the Promise: State Solutions for Government Pension Reform is available today for download at, and we would be happy to assist you with copies for your next event.


Thank you,

Jonathan Williams

Director, Center for State Fiscal Reform
Director, Tax and Fiscal Policy Task Force

American Legislative Exchange Council

(571) 482-5066





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