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article imageMissouri taxpayers to pay extra $55 million into state pensions

By Andrew Moran     Sep 26, 2012 in Politics
Kansas City - Critics argue that the Missouri state pension plans have been underfunded for quite some time and have been overly optimistic in their projections. This is part of the reason why taxpayers will pay an additional $55 million next year into these plans.
It seems Missouri taxpayers will pay more into the state pension plan. Last week, 10 of the 11 members of the Missouri State Employment Retirement System (MOSERS) governing board approved a $55 million increase, or 20 percent, for the pension program next July, according to a news release.
State residents will pay for most of the $330 million pensions next year. The board argued that the purpose of the increase is because there has been poor investment returns and the life expectancy for state workers is higher. Furthermore, there is a large amount of workers who have decided to delay retirement, which will lead to bigger pensions once they exit the state workforce.
The pension fund’s investments made 2.24 percent in returns for the budget year that ended in June. The board members projected an eight percent return over the period of the next 12 months, which is down from the original 8.5 percent projection.
The retirement fund provides benefits for more than 51,000 state workers and 37,000 retirees.
State Budget Director Linda Luebbering told State Watchdog that the increase has been anticipated for quite some time. “That board has been discussing this for a while, and we were aware that the rate would be increasing.”
According to St. Louis Public Radio, Republican State Representative Cole McNary, who is running against Democrat Clint Zweifel for the State Treasurer position, harshly censured Zweifel’s handling of the pensions. He explained that the biggest problems are that they are underfunded, taxpayers will be placed with the debt burdens and the return forecasts are too optimistic.
He did not provide any specific alternatives because he said they don’t know enough and that can be attributed to Zweifel’s lack of transparency. If elected, he would provide a comprehensive plan within 60 days of taking office.
Zweifel, who was the only board member to oppose the increase because there could still be a shortfall even with an increased state contribution, issued a response, in which he stated he takes full responsibility as a steward of taxpayer money.
“On the MOSERS board, I asked the tough questions of MOSERS staff and consistently pushed for more transparent policies that both protect taxpayer money and keep our promises to state employees,” said Zweifel in a statement.
More about Missouri, Missouri State Employment Retirement System, Clint Zweifel
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