Teachers' Retirement System - The Truth

The Truth - Page 4

Fortunately, the Teachers' Retirement System has experienced above average investment returns for a number of years.

The System's three year and five year annualized total returns as of December 31, 1998 were 17.6 percent and 14.8 percent. In R.V. Kuhns' latest report to the Oklahoma State Pension Commission, Oklahoma Teachers' ranked ninth highest of 88 similar public pension plans in total investment returns for the three-year period, and eleventh of 86 for the five-year period ending in December 1998.

There is no immediate danger of a default by the System.

Retirees are receiving monthly benefit payments on time. Any potential problem of meeting obligations are years away, but the lack of assets is expensive, in that, taxpayers will eventually have to make up every dollar of lost investment income the System cannot earn because the asset base is less than it should be. Also, long-range projections are subject to chance. The longer it takes to pay down the System's unfunded liabilities, the more likely unforeseen elements may affect the System's ability to cover obligations.

Benefits earned by members of the Teachers' Retirement System are a true liability of the state.

A recent Attorney General's Opinion (96-21) said, in essence, that the state is responsible for the pension debt owed to TRS members.

Fixing the TRS' financial condition will require hardships and discipline.

It has taken 30 years for the current situation to develop and it will take many years to correct. Money and more money is the only answer. Changing the benefit structure has been studied, but benefits already earned cannot be taken away. If not a true legal debt, there is unquestionably a moral and political promise to pay benefits.

The TRS Board's theme since 1990 has been to address the problem now while there is still time.

Each year the TRS Board recommends maintaining the funding schedule, providing assistance to public schools in meeting their required payments to TRS, and including a plan to fund any new benefit improvements when approved. The Board has suggested increases in revenue from the state's tobacco settlement and appropriations from the state's Rainy Day Fund.

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