Pension report lumps all pension funds together in its unrealistic solutions
Published 3:39 pm Thursday, September 21, 2017
After the release of the long-awaited PFM report, a multi-million dollar study requested by our governor, much discussion, as well as false information, has followed.
The report itself lumps together all of the state’s pension funds in many of its unrealistic solutions. One of the causes blamed for the underfunding was unrealistic assumed rates of return for the funds. This may be true for some of them, but TRS (Teachers Retirement System) earned over 15% after administrative costs last year. In fact, for the last 30 years the average rate of return for this fund is 8%, well over the assumed rate of 7.5%, and in the top seven percent in the nation.
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It would have been higher had KRS not had to exchange many long-term investments the past couple of years to lower-paying short term investments, because the state did not put the required ARC into the fund.
The current mess is not the fault of the current legislators, but they are left with the task of digging out of it.
The blame should be put at the feet of former legislators and administrations (some of whom may still be around in Frankfort), who chose to fund more popular projects that would draw votes when they had a surplus. This is borderline criminal. Blaming, however, does nothing to solve the problem.
We have capable and intelligent leaders who I hope can find a solution that won’t hurt either current teachers or those planning a career in teaching.
It will be costly because of payments that weren’t made in a timely manner, but the TRS should be allowed to continue to administer the pension with its current board and without changing to a defined contribution plan. It will work if we can keep politics out of it!
Peggy Orberson, President
Lincoln Co. Retired Teachers