A statement from Minnesota’s three public pension funds says that a report released Wednesday calling for drastic changes to the system is based on outdated numbers, and that state officials are making good progress in strengthening the funds.
Yesterday’s report from the Center of the American Experiment said major changes are needed in the pension system, including moving new employees to defined contribution systems like a 401k.
But state officials say today that the report uses outdated numbers in claiming the system has $17.3 billion in unfunded liabilities.
“… new, preliminary numbers indicate that unfunded liabilities have dropped below $10 billion,” said the statement (pdf) from Susan Barbieri, communications officer for the state funds.
And, she says, the three funds – the Minnesota State Retirement System (MSRS), Public Employee Retirement Association (PERA) and the Teachers Retirement Association (TRA) – have grown by $23 billion over the past five years, and for the fiscal year that just ended, pension fund assets posted an 18.6 percent return on investment, far above the 8.5 percent target rate.
And she says:
“The Center of the American Experiment repeatedly trots out the same flawed arguments while accusing Minnesota legislators of “political mischief” in managing public pensions. The Legislative Commission on Pensions and Retirement for years has made thoughtful, bipartisan reforms to the public pension plans – saving $6.4 billion in pension costs in recent years.
“Pension reforms in 2010 and 2013 were made in the spirit of shared sacrifice: Retirees accepted a reduced or suspended cost of living adjustment, and employers and active public workers accepted contribution increases. Minnesota was a leader in the nation in pension reform.”