Alaska governor unveils plan to reduce unfunded pension liability
SAN FRANCISCO, Dec 5 (Reuters) - Alaska Governor Sean Parnell will urge in his fiscal 2015 budget plan that the state tap $3 billion in one of its savings accounts to pay down a combined $11.9 billion unfunded liability in Alaska's two largest pension funds.
The proposal would also allow Alaska to reduce its annual contribution to its Public Employees' Retirement System and Teachers' Retirement System to $500 million a year from this year's $600 million and raise the funded status of the two pension funds by 10 percent almost immediately, Parnell's office said in a statement released on Thursday.
The Public Employees' Retirement System is currently 63 percent funded and the Teachers' Retirement System is currently 53 percent funded.
Parnell's plan comes at a time of increasing concern nationwide about the cost of public pensions and the overall financial health of retirement systems for public-sector employees.
Illinois Governor Pat Quinn, a Democrat, on Thursday signed into law long-awaited reforms to his state's public pension system, which is underfunded by nearly $100 billion.
"Given the significant and escalating resources required to pay down the unfunded pension liability, it is in Alaska's interest to dedicate some of our budget reserves now to paying down our obligation, and move the state's annual payment to a lower, more sustainable and predictable level," Parnell, a Republican, said in a statement.