Local school districts would pay 15% of employee income into the Arkansas Teacher Retirement System under a legislative agenda approved last week by pension plan trustees.
Districts currently contribute 14% of employee annual salaries into the system. Trustee chairman Richard Abernathy said the state should pay for the increase of about $28 million a year. The 14% rate generates about $400 million a year.
Employees contribute 6% of their salary, or about $117 million a year, said executive director George Hopkins. Raising the rate to 7% would generate another $20 million a year, he said.
The projected period for paying off the system’s unfunded liabilities of $4.7 billion was more than 100 years as of June 30, up from 66 years at the end of fiscal 2011.
Investments held by the pension plan totaled $11.8 billion on Sept. 30.
The teacher pension plan has 72,000 working members with an average age of 45, and 34,160 retired members.
