Power Breakfast: Big pension holes to fill, hiring school chiefs, test exemptions, Coke connections, Walmart

As Georgia’s lawmakers stare down the barrel of a $1 billion budget gap, they’re also looking at a $1.3 billion payment for 2011 to the state’s two largest pension plans, AJC reporter Russell Grantham writes.

That cost — about $135 for each Georgian — lately has been taking a bigger bite of tax revenues every year, chewing up resources that the state could use for schools or roads or other projects, Grantham writes. Even so, the Teachers Retirement System and the Employees’ Retirement System were under water by at least $10 billion in 2009.

Pension managers and other officials say the plans are not in danger and, in fact, they look good compared with the fiscal train wrecks that some other state pension systems have become, Grantham reports.

Still, Georgia’s plans are under strong pressure from two directions, Grantham writes. First, they lost $11 billion during the stock market crash of 2008 and 2009 — a beating from which they haven’t fully recovered. Second, the ratio of active workers paying in to retirees taking out has declined sharply, Grantham reports.

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3 comments Add your comment

Destin Dawg

March 28th, 2011
7:09 am

Public employees do NOT need a union.. since there is no business or company with a profit motive to Bargain against.. like in the private sector… just us taxpayers.. my parents were teachers… great caring people.. ALL of us contribute to our retirement and health plans.. State employees should too…. Save the $$$ you pay in union dues in an IRA… then you’ll have a retirement !!

Road Scholar

March 28th, 2011
8:01 am

If the state hadn’t reduced there contribution to the State Employees retirement Fund in 2002, it would be totally funded. The teachers and judges retirement funds are fully funded because the state didn’t reduce the amount of their pay in.

TnGelding

March 28th, 2011
8:40 am

If they hadn’t reduced the amount they would owe even more now, and where would the money have come from in past years? When I worked there the employees didn’t contribute anything and the state kicked in 7% of earnings.

They’ll eventually recover what they lost in the crash, if they haven’t already, and a Dow 20,000 will greatly reduce if not solve the shortfall, but the pensions are too generous and need to be revised. And of course the employees will have to contribute a little more.