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PrintBecause of declining investment returns for state pension plans, taxpayers will have to contribute about half a million dollars to pensions in the next few years.
We won't know what the total will be for the next budget until a Sept. 17 meeting, but this year's tab is $375 million.
This sort of pension plan is often considered generous in the private sector. A St. Louis Post-Dispatch article said the top pension earner is former Truman State University President Jack Magruder, who receives $151,188 each year.
Sen. Jason Crowell, R-Cape Girardeau, who is on the board that controls the fund, suggested that employees should contribute to their plans.
Crowell also suggested looking into whether pension benefits should be decreased. Both those options would require a change in law.
State Commissioner of Administration Kelvin Simmons, who is also on the board, said the pension fund could be depleted in times of hardship, such as now, as long as the average gain from investments over time is greater than the expected 8 percent return. This year, the return on investments was a 19 percent loss.
What is the best solution to the pension fund deficit? How do you think it should be funded?
Comments
If I am reading this article right...State Employees do NOT contribute to their retirement??? I myself am a Federal "Gobment" employee and I contribute to mine...and not by choice either. After I have 20 yrs. of service I'll be lucky to receive 20k a year, Sheesh !!!!!!!
OMG 20k a year you poor thing. Hell if you do it right you can live just fine on that.
Magruder's is way out of range for most pension recipients. Didn't the courts mandate that it be a noncontributory plan, sometime back in the 1970s, based on Equal Protection amendment?
Social Security has a cap of about $1,400-$2,100 per month, depending on when you retire between 62 and 70. If the feds remove the cap on the amount of annual income subject to the payroll tax that funds Social Security, then there's a good chance that someone with a high income will die long before he or she has recouped what was paid in.