Public employees across the state will may have to pay more a year from now for their retirement benefits.
Utah Retirement Services, an independent agency that handles the funds for the state's public employees (local and state government), has seen its investment portfolio shrink by 22 percent during the economic slump -- more than $4 billion.
"We have plenty of assets on hand to pay the benefits that are being drawn right now," said URS executive director Robert Newman of the 32,000 people getting those benefits. "It's not like all our pension liabilities are being called due immediately."
What's unclear is how much the increase will be for the 94,000 members contributing to the system.
"You've got to either increase the money coming into the system or reduce the money going out of the system," Newman said. "Even if the markets had a dramatic turnout in 2009, we would still need the increase for 2010."
State lawmakers, who have had to make substantial cuts to the state's budget this year, expect the state employees' share of the shortfall to be around $75 million. The share for other public employees, including city and county workers, is unknown at this point.
"The challenge is, of course, how do we pay for that?" said Sen. Dan Liljenquist, R-Bountiful.
Liljenquist is the chairman of the Retirement and Independent Entities standing and appropriation committees. All the stakeholders in the retirement system will be meeting in September to discuss options, he said.
"We do not want to be in the situation where we create unfunded liabilities," said Liljenquist, who like most Utah lawmakers is fiercely protective of Utah's financial reputation as they watch other states struggle.
The Utah League of Cities and Towns is also watching the fund shrink with growing concern. Lincoln Shurtz, the director of legislative affairs for the league, writes on his blog that members see value in keeping employee benefits but are now looking at steps they'll have to take to ensure the stability of the system.
"We are anticipating sizable increases in the retirement contribution rates that will be required of public employers to maintain the current benefit package for public employees," he wrote. "At this point we can only speculate about future increases in state and local government retirement funding obligations, but most experts believe we will witness increases for at least the next two to four years."
Posted in Local, Govt-and-politics on Thursday, July 9, 2009 12:10 am Updated: 3:13 pm.
© Copyright 2009, Daily Herald, Provo, UT | Terms of Service and Privacy Policy
