Legislators Propose Change In Pension Funding

The General Assembly’s Joint Pensions Committee unanimously recommended Wednesday abandoning a pension funding method that has allowed the state to pay hundreds of millions less each year into the state retirement system than actuaries said was needed.

The so-called “corridor method” was instituted 10 years ago when the system was almost fully funded. But over time, due to lower contributions and several years of poor investment returns, the $37 billion fund only covers 65% of the future liabilities for the 376,000 active and former state employees and teachers it covers.

There was virtually no discussion of this major change, which was aired more extensively at a Nov. 14 hearing. The change must be approved by the House and Senate budget committees on which all 16 members of the Joint Pensions Committee sit.
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