PERA has $1.2 billion increase in unfunded liabilities

From Capitol Report New Mexico - The bad news for the state’s largest pension program — the Public Employees Retirement Association (PERA) — got worse on Tuesday (Oct. 23) when its executive director told members of a committee at the Roundhouse that PERA’s unfunded liability increased by $1.2 billion in the past year. “The increase was not unexpected,” Wayne Probst told the Investments and Pensions and Investment Oversight Committee. “Unfortunately, the increase is greater than anticipated.”

Last year, the unfunded liability — or, in plain English, the amount of money needed over time to make up the difference between incoming contributions and outgoing benefits to retirees — has risen from $5 billion to $6.2 billion. In the last three years, the unfunded liability has nearly tripled (it was $2.3 billion in mid-2009).
“The increase was driven primarily by poor investment performance in fiscal year 2012,” Probst said of the various stocks and bonds the $11 billion budget PERA handles for government employees who range from police officers to fire fighters to workers at state agencies.
PERA’s problems are indicative of public employee unions across the country that find themselves in a squeeze due to demographics of an aging population, an economic downturn and in some cases, guaranteed benefits that have proven overly generous. Read more

PERA has $1.2 billion increase in unfunded liabilities