Monday, January 04, 2016

State Pension Plans are Underfunded


The good news for Arkansas: A relatively small percentage of our state revenues would be needed to make our pension plans viable. The bad news for Arkansas: The amount we are actually paying in now is a smaller proportion of what we would need to pay in to make our plans viable. 

Those two things show up on the graph as our total bar being short, but the proportion of the bar that is orange vs. blue is high for our state. In Arkansas, teacher retirement plans are separate from state employee plans. Our teacher retirement pension is much more fiscally sound. What I fear, and what retired teachers around the state should fear, is that the politicians will try to merge the two systems into one. This will mean that teachers will be stuck with a pension fund that is less sound in order to cover the irresponsible decision to under-fund the state employee plan.

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