Treasury says pension reforms are improving funded ratios and projects $6 billion in savings

At a legislative appropriations committee hearing, treasury officials reviewed multi-decade pension funding trends and the effects of recent reforms, saying the systems’ funded ratios have risen in the last four years and quantifying approximately $6 billion in taxpayer savings tied to benefit and funding changes.

Committee staff framed the background: the Great Recession and a decade-long decline in funded ratios moved the state retirement system from about 94% funded before the recession to roughly 66% afterward, and moved the teachers’ system from about 81% to about 51% by 2020. A 2020 experience study reduced the assumed rate of return from 7.5% to 7.0%, which increased reported unfunded liabilities and the actuarially determined employer contribution (ADEC).

The presenter summarized the legislative and administrative response. Act 75 created a benefits-design and funding task force, whose recommendations were implemented in Act 114. That package included a one-time state payment, ongoing additional ADEC-plus contributions, increased member contributions, benefit…