Texas employee retirement system sounds alarm on unfunded balance

[TexasTowelie]

State employees who already are paying more into a pension with recently diminished benefits could be facing more of the same depending on how lawmakers choose to deal with a chronically underfunded retirement plan.

Despite changes made to the state’s second largest pension fund in the past five years aimed at eroding a sizable unfunded liability, the Employee Retirement System of Texas – the state agency that provides retirement and health benefits to more than half a million state employees, retirees and their families – and the state Comptroller are warning that the liability is snowballing by some half billion dollars a year and quickly will get worse if nothing is done about it.

Read more: http://www.mystatesman.com/news/news/texas-employee-retirement-system-sounds-alarm-on-u/njYJf/#91e0893c.3580657.735588 (subscription required)

[Thinkingabout]

1. Naw, can't be true, never would Perry and friends do anything wrong.

Maybe Rick needs bigger glasses.

[malokvale77]

2. TT it so sad...

that Texas has become such a Banana Republic.

It is only going to get worse under this latest legislation body.

We are truly screwed.

[TexasTowelie]

4. The situation could actually be worse.

Back in the 1980s when the Texas Public Employees Association was negotiating with the legislative leaders for pay raises they made a concession for a smaller raise, but in return they had language inserted into the law so that state employees would receive a minimum interest rate of 5% on their share of the pensions. If they had not worked to get that legislation passed, then the state could have contributed even less to the pension system. Nobody expected interest rates to drop as low as they have been over the last ten years so it has been a plus for state employees; however, it does increase the unfunded liabilities faced by ERS. There has been talk of having new employees enter into a 401k type program, but I do not believe that has been adopted into law.

FWIW, I do not believe that the teachers retirement system has a similar deal and they are much more seriously underfunded than ERS.

[malokvale77]

6. Like I said...

It is only going to become worse.

I hope all Texans are holding on to their asses.

We are in for a very bumpy ride.

[Skittles]

3. well lookie here

[TexasTowelie]

5. See my comment in post #4.

The state continually looks at minimizing their contributions to both the ERS and the TRS to make up for budget shortfalls. John Sharpe was the first to try and renege on the promised contributions to ERS, while Bush and Perry have been even worse.

[Gothmog]

7. Perry used the pension system to reward contributors

How could the plan possible go wrong?