One bane of many a parent’s existence, these days, is new thinking on the teaching of mathematics. It often doesn’t make sense, and we suspect that the notion that it leads to a deeper understanding of the concepts involved is pure (false) academic theory. But reading a letter, yesterday, by Myra Mercier, of Foster, made me think that public schools may be merely preparing students for interaction with public accounting:
I was livid to find out that my grandchildren were being taught what I call “close-enough” math. The correct answer was not required; only a concept was being taught. My reply to my granddaughter was “try to balance a checkbook with a concept.”
What came immediately to mind was Ted Nesi’s explanation of the “weird, whacky pension math” that West Warwick used to use in determining its level of fundedness:
Translated into English, until July 2000 West Warwick and its actuaries just kept using that manageable-looking $1.6 million estimate of its pension shortfall every year – without checking whether it was still accurate. The post-2000 method (“Entry Age Normal” – not “Frozen”) is the standard one used in Rhode Island. A few knowledgeable pension-watchers told me they’d never heard of “Frozen Entry Age Normal” (though GASB allows it).
I’d suggest, as I’ve endeavored to explain, that all of our pension systems are operated on a “close-enough” system that is checked for accuracy only in the most diluted sense. How else could one explain the general sense that a system that’s 80% funded, with an investment return prediction fully 3% higher than five- or ten-year actual results would be a healthy system? It’s as if that’s close enough, as long as we understand the concept that this is a debt that we’ll have to pay, and we hope that we won’t have to pay all of it ourselves.
But the concept is distorted. Eighty-percent funded means that the pension fund is one-fifth shy of the money that it would have to have in the bank to bring in the amount of investment profits necessary to fund pensions into the future. Discount rates higher than what the fund is actually bringing in means that even 100% funded, now, isn’t going to cover what’s needed later.
West Warwick is a mess, no doubt, but there’s reason to fear that another decade from now, young journalists will be looking at “entry age normal” and marveling that Rhode Islanders let politicians get away with “close enough.”