The Honolulu Advertiser reports that the consultant noted
the funding problem is likely to worsen this year even if investment returns
Consulting firm Gabriel Roeder Smith & Co. told ERS
trustees the amount of what the pension plan potentially owes workers in the
years ahead versus what it has in assets widened by a little more than $1
billion in the year ended June 30, 2009, the news report said. The unfunded
actuarial liability stood at $6.24 billion at the end of the year, and may
increase to more than $7 billion this year, the consultant said.
For now, the system is 65% funded, down from about 69%
last year. At that level, the pension plan is in the bottom 25% of public
retirement systems, the consultant reported.
The news report said the bad news was expected because of
the major market downturn of the last year, and because of higher-than-forecast
spending related to employee salaries. The actuarial consultant reported the
value of ERS’ investment assets measured on an actuarial basis fell by $808.7
million, or 18%.
However, since the end of the fiscal year the investment
returns have improved, with the ERS fund growing by 13.5% since July 1 (see Public Pension Systems Recovering from Downturn).