MONTGOMERY, AL (WSFA) - Not that long ago the Retirement Systems of Alabama had the assets to fund 100 percent of retirement liabilities.
The recession erased that and now the growing unfunded liability needs to be a key focus of the new legislative session that begins March 1.
Health care costs are the main culprit and the new federal health care requirement allowing dependents to remain on their parent' insurance until they're 26 will add $2 million more to health costs.
The solutions are tough ones for both existing and new members to the plans: pay more, get less and deal with possible plan changes.
Right now the pension plan can be activated at age 45. The minimum age needs to be changed to 62. It would be more in line with other pension plans. To be fair to existing members that age change may need to be different but it will need to be after age 45.
Member contribution for retirement is now 5% of pay. An increase to at least 6% perhaps phased in over a few years makes sense. Neighbor Mississippi members pay 9%.
Health care benefit adjustments must also be reviewed.
The recession has narrowed the gap between private and public sector pay and in some cases, widened the disparity in health benefits making it even tougher for taxpayers to shoulder paying more for state worker pensions and benefits to close the unfunded liability gap.
They will still need to - but state workers must also share the added burden as well.
EDITOR'S NOTE: The Retirement Systems of Alabama holds a major financial investment in Raycom Media, the parent company of WSFA 12 News.