GERS Not Out of Danger Yet, According to Actuarial Analysis Being Presented to Senators Friday

The 35th Legislature will meet later today to hear from representatives of the Government Employees Retirement System (GERS), who will provide an overview on enrollment, finances, and future projections.

Consortium journalists have viewed a copy of the presentation that will be delivered to legislators, and have noted one area that is sure to draw questions from the assembled senators — an estimated unfunded liability of $4.4 billion.

An “unfunded liability” is a debt that an entity or organization does not currently have the assets or investments to cover. Actuaries have calculated that GERS can only fund eight percent of the system’s 4.8 billion dollar liability, as of September 30, 2022.

The analysis also shows that actual contributions submitted by employers have been falling far short of the actuarially determined contributions for at least two decades.

Actuarially determined contributions, according to the Government Finance Officers Association(GFOA) website gfoa.org, “represent[s] the amount needed to fund benefits over time. If the contributions are not fully paid, interest accrues on the unpaid portion at the plan’s expected long-term rate of return. Persistent underfunding will ultimately jeopardize the plan's sustainability. The GFOA recommends that the full amount of the actuarially determined contribution be paid to the plan each year.”