April 16, 2010

Underfunded Teacher Pension Plans

Retirees are sucking school funding away because legislators allow public pension plans to assume their investments will make a killing on the stock market.  Those same legislators force private pension plans to low-ball any expectations on their investments.  Thus all public pension plans are underfunded so the lawmakers can spend pension money instead of saving it without regard for the coming crash, which is now arrived.

Of the fifty-nine funds in our sample, fifty-six show a funding deficit in their financial statements. After we made adjustments, all fifty-nine showed funding shortfalls. But some funds are in much better shape than others.

On the bright side, five plans are 75 percent funded or better: teacher-specific plans in the District of Columbia, New York State, and Washington State, and state employee retirement systems in North Carolina and Tennessee.

The worst-funded plan in our sample is the West Virginia Teachers' Retirement System, which we estimate to be only 31 percent funded. The four states whose plans have the next-worst funding gaps are Illinois, Oklahoma, Indiana, and Kansas; all are less than 40 percent funded.

We really, really need to get rid of all local and federal congress people who have put us into this mess.  They've converted their responsibility to represent us with their votes into positions as purchasing agents for their districts.

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