This letter is in reference to the negative rhetoric that has been printed throughout Missouri on teacher retirement. I would like to set the record straight.
The funding status of Missouri's teacher retirement system is pre-funded at 85 percent. This is extremely good considering two major economic downturns in the past 10 years. Missouri is ranked 47th in teacher salaries as the legislature has failed to fully fund the schools in recent years. It is the decent retirement benefits Missouri offers to educators that keeps experienced educators in the classroom and allows for us to have a very good public education system in Missouri at a very low cost. We all should be in favor of American workers and teachers having an adequate retirement.
The Public School & Education Employee Retirement System of Missouri is a great example of a system providing adequate pension benefits for its employees and puts $1.9 billion into the Missouri economy each and every year. As mentioned, Missouri teacher retirement is 85 percent pre-funded. The funded status of a pension plan provides an indication of the overall health of the plan. An 80 percent level of funding is generally considered the standard for adequate funding.
The continued financial strength of the Missouri teachers' retirement system is a result of outstanding investment returns over the last two fiscal years, updated actuarial assumptions based on a recent five-year experience study and a new funding policy adopted by the retirement system's board in August 2011.
The system achieved record high investment returns in fiscal year 2011. The public school system and the education employee system earned returns of 21.8 percent and 21.4 percent, respectively, for the fiscal year ending June 30, 2011, which were the highest fiscal year returns for both systems in more than 20 years. The total assets of both the public school and education employee retirement programs were approximately $29.5 billion on Oct. 31, 2011, making the combined entity larger than all other public retirement plans in Missouri, and the 42nd largest defined benefit plan in the United States.
Jim Kreider is the executive director of Missouri Retired Teachers Association.