Benge: Teacher Retirement System Fix Is Working
A recently enacted law designed to shore up Oklahoma's Teachers Retirement System is rapidly improving the system's financial standing, state lawmakers announced today.
Projections contained in a new actuarial report indicate the system's unfunded liability has begun to fall and will continue declining thanks to a growing infusion of cash approved by the Legislature this year.
"This is good news for our retired teachers and future retired teachers," said House Appropriations & Budget Committee Chair Chris Benge, R-Tulsa. "It's important that the Legislature remain committed to the contribution schedule we set out last year."
Senate Bill 357, approved during the 2007 legislative session, increased contribution rates paid by schools into the Teacher Retirement System. Oklahoma schools were given an additional appropriation to ensure they have money to contribute to the plan. Once fully implemented in 2010, the plan is expected to provide an annual infusion of $60 million per year for the retirement system. It is expected to pump more than $200 million into the system over the next five years. The plan has already benefited the retirement system's standing, according to the actuarial report. The system's funded ratio - the ratio of assets to liability - has increased from 49.3 percent to 52.6 percent. Most of that improvement came as the result of Senate Bill 357, although a healthy market return on fund investments also contributed, Benge noted.
At the same time, the retirement system's unfunded actuarial accrued liability (UAAL) decreased $70 million. According to actuarial projections, the UAAL will continue falling until the system is fully funded. Actuarial projections indicate the system will be 85 percent funded within 16 years - four years ahead of the schedule anticipated when lawmakers approved Senate Bill 357.
"This is great news for the entire state. The actuarial report shows that SB 357 will actually reduce our unfunded liability at an even faster rate than we'd initially projected," said Mike Mazzei, Co-Chair of the Senate Finance Committee. "Clearly, our legislative efforts to protect the pensions of Oklahoma teachers are working. Not only will this boost our bond ratings, but ultimately, we have averted a disastrous economic event that would have impacted our entire state. "I also want give credit to the Senate's Appropriation Co-Chairs, Johnnie Crutchfield and Mike Johnson, as well as to Senator Kenneth Corn for their work on SB 357," Mazzei said. "This may well be most important legislation of the 51st Legislature."
The retirement system's external cash flow is also on the right track, Benge said, noting that the $821 million paid into the system this year exceeded the $806 million paid out in benefits. "That's the teachers' retirement system's first positive cash flow since 1997," Benge said. He said legislators from both sides of the aisle should be commended for the reforms approved last year that will benefit Oklahoma's teachers for decades. "We still have a long way to go, but this is a huge step toward addressing a problem that has been ignored for years," Benge said.
Projections contained in a new actuarial report indicate the system's unfunded liability has begun to fall and will continue declining thanks to a growing infusion of cash approved by the Legislature this year.
"This is good news for our retired teachers and future retired teachers," said House Appropriations & Budget Committee Chair Chris Benge, R-Tulsa. "It's important that the Legislature remain committed to the contribution schedule we set out last year."
Senate Bill 357, approved during the 2007 legislative session, increased contribution rates paid by schools into the Teacher Retirement System. Oklahoma schools were given an additional appropriation to ensure they have money to contribute to the plan. Once fully implemented in 2010, the plan is expected to provide an annual infusion of $60 million per year for the retirement system. It is expected to pump more than $200 million into the system over the next five years. The plan has already benefited the retirement system's standing, according to the actuarial report. The system's funded ratio - the ratio of assets to liability - has increased from 49.3 percent to 52.6 percent. Most of that improvement came as the result of Senate Bill 357, although a healthy market return on fund investments also contributed, Benge noted.
At the same time, the retirement system's unfunded actuarial accrued liability (UAAL) decreased $70 million. According to actuarial projections, the UAAL will continue falling until the system is fully funded. Actuarial projections indicate the system will be 85 percent funded within 16 years - four years ahead of the schedule anticipated when lawmakers approved Senate Bill 357.
"This is great news for the entire state. The actuarial report shows that SB 357 will actually reduce our unfunded liability at an even faster rate than we'd initially projected," said Mike Mazzei, Co-Chair of the Senate Finance Committee. "Clearly, our legislative efforts to protect the pensions of Oklahoma teachers are working. Not only will this boost our bond ratings, but ultimately, we have averted a disastrous economic event that would have impacted our entire state. "I also want give credit to the Senate's Appropriation Co-Chairs, Johnnie Crutchfield and Mike Johnson, as well as to Senator Kenneth Corn for their work on SB 357," Mazzei said. "This may well be most important legislation of the 51st Legislature."
The retirement system's external cash flow is also on the right track, Benge said, noting that the $821 million paid into the system this year exceeded the $806 million paid out in benefits. "That's the teachers' retirement system's first positive cash flow since 1997," Benge said. He said legislators from both sides of the aisle should be commended for the reforms approved last year that will benefit Oklahoma's teachers for decades. "We still have a long way to go, but this is a huge step toward addressing a problem that has been ignored for years," Benge said.
Labels: Chris Benge, Teacher Retirement System
posted by Mike McCarville @ 5:39 PM
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