$5 billion in gains paint better picture for teacher pension system
FRANKFORT, Ky. (WTVQ) – Between being underfunded and changes to try to get it financially in order, the state’s teacher pension plan has been the center of controversy for years.
But in the last year, its investments have done very well. In fact, the returns are among the best in the country.
And some of the changes made by Republican lawmakers have contributed to the successes.
As of now, the returns will make the budget demand less than anticipated while still allowing the state to pay off the unfunded portion of the pension in 24 years instead of 30.
“That, you know, we reported to the pension over sight board a couple of months ago that returns for the first nine months were 22 percent, they are closer to 30 percent now. And instead of what was reported to the over sight board a few months ago, $4 billion in gains for the pension that’s going to be a little over $5 billion in gains for the pension. So there is fantastic news with these exceptional, exceptional, investment returns and they’re going to have a big impact on the future,” Beau Barnes, general counsel for the Teacher Retirement System, told the Interim Committee on State Government during a hearing Tuesday.
But even with the decreased budget requests, the state likely will have t pay in more than $400 million in pension contributions and more than $600 million toward the shortfall. The $1 billion is about 10% f the state’s total $11 billion budget.