Meacham Urges Lawmakers To Fix Pension Funding Problems
Thursday, April 12th 2007, 5:56 pm
By: News On 6
OKLAHOMA CITY (AP) -- Oklahoma's top financial officer urged lawmakers Thursday to pump more state dollars into Oklahoma's under funded state pension systems, declaring that the pensions' unfunded liability "can no longer be ignored."
"A significant infusion of money is needed before the problem gets any worse," Treasurer Scott Meacham said in a letter to Gov. Brad Henry and legislative leaders. "The longer the problem is left unchecked, the more difficult it will be to solve."
Meacham described the pension problems as "the number one financial threat the state is facing."
A spokesman for Henry, communications director Paul Sund, said the governor agrees with Meacham's sense of urgency and has called for increases in state contributions to improve the financial health of state pension systems, particularly the teacher's retirement system.
"We have to address the unfunded liability of the teacher's retirement system this year. We can't continue to put it off," Sund said.
Meacham, Henry's secretary of finance and chairman of the state Pension Oversight Commission, said the state's seven pension systems have overall funding of 59.6 percent.
"Stated another way, Oklahoma has more than $11 billion in current unfunded liabilities in its state pensions," his letter states.
Meacham said the problem was created by promising more benefits to state retirees than there is money in the pension systems to pay for them.
The teacher's retirement system has $7.6 billion in unfunded liability, according to a chart attached to Meacham's letter. The Oklahoma Public Employees Retirement System has $2.2 million in unfunded liabilities.
He said the solution involves increasing state contributions or finding another way to increase funds coming into the system.
"If this problem is left unaddressed, the systems will eventually require a cash infusion of staggering proportions to meet current payment obligations," Meacham said. That could force an increase in taxes or cuts to vital state programs, he said.
Last year, the oversight commission asked lawmakers to shore up funding for the system, but Meacham said lawmakers took no action.
"The ultimate impact of continued inaction will be borne by the people of Oklahoma and they deserve responsible action on our part," he said.