Is our pension fund in trouble???

If anyone knows what's going on, let
us know so we can pass it along.

CoffeeCops

AG warns of $20 billion threat to
pension funds

By R.G. Ratcliffe - The Houston Chronicle

AUSTIN — Texas Attorney General Greg Abbott warned

Wednesday that the nation's current financial crisis makes a
$20 billion unfunded liability in the state and local public pension
funds a financial threat to public employees and taxpayers.

But some of the funds said Abbott is overstating the importance

of unfunded liabilities in judging the soundness of a pension.

Abbott's warning was in keeping with one he issued last year calling

for greater regulation and transparency of the state's pension funds.

He also wants his office to have some oversight authority,

which it now lacks. Abbott on Wednesday said his call has a

fresh importance “in the wake of recent instability in the country's

financial markets.”

Public pensions are funded through contributions from the employees

and the government they work for and from the gains of investments

in bonds and the stock market.

Abbott said there are 80 public pensions in Texas that have $20 billion

in unfunded liabilities. That means the annual contribution rate for

employees and the governments is less than what would be required

to pay out the pension to every person covered over a 30-year period.

“Improperly managed public pensions pose a financial threat to public

employees and the taxpayers alike,” Abbott said in a news release

announcing a Web site dedicated to listing the unfunded liabilities of

public pensions: public pensions

The Houston firefighters' pension has an unfunded liability of $346 million.

The municipal employees pension is underfunded by $934 million.

And the city police pension fund had an unfunded liability of

$852 million, all according to Abbott's data.

Craig Mason, the chief of pensions for the city of Houston,

said it's “not fair” to look only at unfunded liabilities to judge

a pension's health: “It's only one element of the actuarial process.”

The municipal employee and police pension funds will have greater

solvency in the future because of cuts in future benefits and because

of increased city contributions to the police fund, Mason said.

He said the current instability in the stock market does not matter

in the short run because investment gains and losses are averaged

out over five years. “A short-term swing in the markets is not

something to worry about,” Mason said.

The San Antonio Fire and Police Pension Fund

has an unfunded liability of $204 million, Abbott said.

A call to the fund for comment

was not returned.

Two of the state's largest pensions are the Teacher Retirement

System of Texas, with $12.5 billion unfunded liability, and the

Employees Retirement System of Texas, with a $1 billion

unfunded liability.

But a financial review of the teacher's system put out by an

independent auditor last August shows the unfunded liability

is not that high because the pension has $8.7 billion in deferred

investment gains that are not included in the accounting.