SPRINGFIELD, Mo. — Thursday, State Treasurer Eric Schmitt’s expressed concern over the Missouri State Employees’ Retirement System’s pension system’s long-term health.
MOSERS spokesperson Candy Smith acknowledged the pension fund’s financial challenges but wants viewers to hear the answer to a very important question.
“Is MOSERS going to be able to pay my retirement benefits? And the answer to that is yes, that promised benefits are secure,” Smith said.
This week, Schmitt flagged a decline in MOSERS’ funding ratio – which is the amount of assets the pension has versus its liabilities – to 60 percent.
But this doesn’t mean that MOSERS is out of money. The 60 percent figure is a reflection of what MOSERS owes beneficiaries over time.
In real dollars, MOSERS has short-term solvency.
“We do have in the MOSERS pension trust fund right now $8 billion,” Smith said.
The question now for policymakers is what to do to get the funding ratio higher – 80 percent is a rule of thumb.
Getting there will likely require more state funding and increased contributions from beneficiaries. MOSERS recipients joining after 2010 have to contribute to their pensions.
Schmitt has also raised concern that MOSERS spends too much on fees given consistent misses on projected investment returns.
Smith says the MOSERS Board is committed to getting the system on the right financial track and offers some perspective.
“A pension system like MOSERS have a very long-term time horizon,” Smith said.
But, time is money, so fixing the pension funding problem soon will pay dividends later.