Public sector pensions don’t get as much ink (or as many bytes) as stories about Trump, Beyonce, or Taylor Swift. But our newsfeed never runs dry. Stories pour in daily highlighting pension woes and political battles across the country. here’s a sampling of what we found in our inbox today:
Kentucky Governor Matt Bevin declares “day of reckoning” in pension crisis. Background: Kentucky’s public sector pensions are among the most underfunded in the country. The governor says the time has come to stop “kicking the can down the road” and grapple with pension debt, which amounts to $15,000-plus for each of Kentucky’s 4 million residents.
Pressures rise on Mississippi pension finds to seek more money. Background: Mississippi’s Public Employees Retirement System will be just 63 percent funded in 2042, according to current projections. Something has to give, but asking employers (aka taxpayers) to contribute almost a quarter of state worker salary costs to pensions seems unworkable. The state is struggling to find solutions.
More than half the new money for education in Georgia’s budget will go to prop up state pension funds for school and university employees. Background: “Because of mediocre returns on investments in some recent years and a shrunken employee base paying into the system, the state had to pump an extra $223 million into the Teacher Retirement System this year to improve its financial security. The Atlanta Journal-Constitution reported in June that the system could need an extra $350 million to $400 million next year, eating up 40 percent to 45 percent of all new tax revenue.”
Changes coming to S.C. pension benefits. Background: Together, the S.C. Retirement System and the Police Officer Retirement System “have promised about $20 billion in benefits above the value of the assets they have on hand to pay for those benefits.” To help reduce that shortfall, employee contributions will rise sharply, and new pension enrollees could be placed in a defined contribution or hybrid plan, in place of the current defined benefit plan.
We could go on and on, but you get the drift.