Georgia pension funds solvent, study says

But state urged to set aside more for retiree health care

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Georgia is still setting aside enough money for state worker retirement funds, a Washington, D.C., think tank says.

And while it's not stashing away enough for retiree health benefits, it's doing better than most other states, the Pew Center on the States reported Monday.

The center's update on state pension funds gave Georgia high marks for the fiscal year that ended July 30, 2009, the most recent year for which the center said it has figures.

The center said Georgia has set aside enough money to meet 87 percent of its total liabilities, well above the national average of 78 percent.

The Georgia figure was down from 92 percent in 2008.

But that was due mostly to a recession-driven downturn in pension fund investments, said Stephen Fehr, a researcher for the Pew Center.

"Georgia is doing a good job," Fehr said. "Basically, anything over 80 percent is great.

"It's making all the contributions to the fund that it's supposed to make. It's handling its pensions funds very responsibly."

That was in sharp contrast to many other states. Illinois and West Virginia were in the worst shape; New York was in the best.

Nationwide, according to the update, unfunded pension liability rose from about $1 trillion to $1.26 trillion in fiscal 2009.

When it came to health care and other non-pension benefits, the center found that, through fiscal 2010, Georgia had set aside only 4 percent of its liability.

Its total liability for those projected costs was about
$20 billion, compared to about $80 billion for pensions, according to the report.

But the center found 19 states had set nothing aside and only seven states had funded at least a quarter of their liability.

Georgia needs to salt away more money for retiree health benefits, said Alan Essig, executive director of the Georgia Budget and Policy Institute.

Another part of the problem, he said, "is getting a better handle on long-term health costs."

He said the issue "is not critical now but will become more difficult to deal with the longer we wait."

But Essig said the state "traditionally has always done relatively well" in handling its pension funds.

"Other states have played games and ... have used their pension funds as banks," he said.

As stock markets improves, so will return on investments of Georgia's retirement funds, Essig said.

Brian Robinson, a spokesman for Gov. Nathan Deal, noted most state offices were closed Monday in observance of Confederate Memorial Day.

"I don't have immediate access to all the facts I'd like," Robinson said. "But I can tell you that Gov. Deal is continuing principles of fiscal prudence that long precede him.

" ... When it comes to retirement funds, you see the wisdom of Georgia's ways. ... And making the tough decisions to fulfil our responsibilities to retiree health care is something the governor will prioritize."

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corgimom
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corgimom 04/26/11 - 08:49 am
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"It's making all the

"It's making all the contributions to the fund that it's supposed to make. It's handling its pensions funds very responsibly."

If it were making all of its contributions to the fund, the fund would have set aside money to pay 100% of its liabilities.

That's like saying, "I set aside money to pay 87% of my bills, I'm doing great!"

Chillen
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Chillen 04/26/11 - 10:24 am
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Good news for our state

Good news for our state retirees. However we really need to revise the pension program. Employees should contribute to a 401K like the rest of us & learn to live off of that. Reform needs to begin immediately.

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