Unfunded Government Retirement Plans Could Be Billions Short

Government retirement plans for tens of thousands of former government workers in Missouri face a financial crunch within months. State and local governments have only a few months to determine how much it will cost to pay for the benefits promised to their employees who have retired…or who will retire….in the next several decades. Budget officials say the state’s unfunded liability is about 1.3-billion dollars. New federal rules will require the legislature to put about 40-million dollars a year into its budget for at least 20 years to make sure promised benefits are met. Local governments are affected by the requirement, too, because of a mandate from the Governmental Accounting Standards Board. Commissioner of Administration Michael Keathley says some programs will take a bigger hit than others. He says teacher retirement funds and some major metropolitan area police and fire retirement funds might have the biggest problems. He says any public retirement fund that has promised high support for health insurance coverage will face substantial liabilities. Keathley says current state government retirees are unlikely to see a reduction in their benefits. But he says the state might change its retirement program offerings for future state workers. He says local governments–cities, school districts, fire districts, and others will have to tell the public what their unfunded liabilities will be later this year and how they plan to meet those costs.