“When I became a member of the board it was almost 2-to-1 actives versus retirees,” Tom Pearson, president of the Duluth fund’s Board of Trustees, told the Duluth News Tribune. “Now it’s completely flip-flopped. We can’t sustain that.”
Duluth’s pension is 54% funded. Last year it was 63%. Before the market crash of 2008, it was about 90% funded, and has been historically robust. Between this and Duluth’s slow recovery from the Great Recession, a merger seems to be the best answer, said Jay Stoffel, former executive director of Duluth’s teacher retirement fund, and current deputy executive director of the Teachers Retirement Association in St. Paul.
According to the news report, the Duluth fund also lost members when the state directed instructors at Lake Superior College in 1995 and Duluth charter schools in 2002 to join the statewide teachers fund. Duluth’s unfunded liability as of June 30 is $162 million, up from $119 million last year.
Karen Kilberg is the new executive director of the Duluth fund, and formerly led the Minneapolis teachers retirement fund until its 2006 merger with the TRA. The News Tribune reports both she and Stoffel said Duluth’s problem last year wasn’t its investments.
“Duluth had a greater return than all other entities for last year,” Kilberg said. With a 16.7% return, it was among the top 10 percent of public pension funds in the nation, Stoffel added.
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