Actuaries said last week the Arkansas Teacher Retirement System will need more than 100 years to pay its current unfunded liabilities of $4.4 billion, up from a 66-year projection in June 2011.

Executive Director George Hopkins said the pension system had zero returns on investments in fiscal year 2012, which ended June 30. The value of the portfolio has increased to $11.7 billion from $11.4 billion since fiscal 2013 began, he said.

The system assumes an 8% annual return on its investments, Hopkins said. A 17% return in fiscal 2013 would reduce the unfunded liability payout to the 30-year target set by trustees.

Options for reducing the liability payout period to 30 years include an increase in the contributions from employers and eliminating a $75 per month payment to most retirees, Hopkins said.

Other solutions include a tiered system that would reduce promised benefits for new hires.

Trustee chairman Richard Abernathy said the system will ask the 2013 Legislature to increase the rate paid by employers to 15% of employee salary from the current 14%. The employer rate has not been increased since 2004, Abernathy said.

The additional 1% is expected to bring in $28 million a year. The system receives $400 million a year at the 14% rate.

Raising school districts’ rate to 16.75% would bring in $80 million a year, Hopkins said, but an increase of that size is not feasible.

Reducing the monthly insurance stipend of $75 to retirees would reduce the system payout by $42 million a year, Hopkins said, but many retirees are dependent on it.

Teachers contribute 6% of their annual salary to the retirement system, or about $117 million a year. The employee rate has not increased for 43 years.

Raising the employee rate to 7% would generate an additional $20 million a year, Hopkins said.

The pension plan has 72,293 working members with an average annual salary of $33,995.  The 32,100 retired members receive total benefits of $657 million a year.

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