Such deficits are likely to continue as well, according to a warning by the Investment Advisory Council Chairman Clarence Roberts Jr. Roberts wrote in a report that the $20 billion fund, covering mainly teachers and state employees, took its losses by paying out $1.023 billion while taking in only $196 million, according to the New London Day. He said that this deficit represented nearly a 9% increase over last year’s deficit.
Roberts is stressing that lawmakers can no longer contribute less to the fund than the fund’s actuaries are recommending. The teacher’s plan is currently underfunded by 75.9%, while the state employees’ plan is underfunded by 61.6%, according to the Day. Together, these funds represent 92% of the pension plan’s assets under management.
The deficit issue was released at the request of a Connecticut newspaper as a draft report because the computer system needed to create a finished report was not working properly, according to the Day. The system, which cost the state $110 million, was launched last summer, but is still causing the state problems.
Illinois Pension Bonds
In other news regarding state pension funds, Illinois lawmakers are considering issuing another set of bonds to cover the state’s pension liabilities, according to Crain’s Chicago Business.
According to a state commission, Illinois will have to pay out $2.5 billion in the fiscal year starting in July, over $600 million more than last year, to cover pension obligations and debt services on last year’s bond issues. With the state having to cover $1.9 billion for early retirement incentives, on option being studied is further bond issues. Illinois has already utilized this avenue for partially financing its fund, issuing $10 billion in bonds last year (See Illinois Legislature Okays $10 Billion Pension Bond Issue ).