The Arkansas Teacher Retirement System is unlikely to eliminate its $4.4 billion of unfunded liabilities over the next 30 years at the current return from the system’s investments, according to actuaries

They told trustees last week that it would take 66 years to work off the accumulated liabilities unless investment earnings increase significantly.

The teachers’ retirement system is the largest of six pension plans operated by the state.

The retirement systems are encouraged by state law to eliminate their unfunded liabilities in 30 years, but that is unlikely, according to a report from actuaries Gabriel, Roeder, Smith & Co.

Judith Kermans of Gabriel told the trustees that the 30-year paydown target could be achieved by 2015 if system investments return 12% in fiscal 2012 and 8% each year for the next three. However, she said, if there is no growth this year and 8% over the next three, the period would be extended to more than six decades.

The system’s investments grew to $11.7 billion at the end of fiscal 2011 from $9.8 billion at the beginning of the year. By the end of October, holdings slipped to $11 billion.

Any likelihood of growth over the current four-year period will be hampered by significant investment losses posted in fiscal 2008 and 2009, she said.

Local school districts contribute 14% of teacher pay into the system, a level that has not changed since 2004.

Kermans said raising the local contribution would strengthen the retirement system. District contributions totaled $390 million in fiscal 2011.

Executive director George Hopkins was asked to develop cost-cutting recommendations that the board could present to the Arkansas General Assembly when it convenes in January for its biannual budget session.

The retirement system includes 72,300 working members with an average annual salary of $34,000 a year, and 32,000 retired members with total annual benefits of $657 million.

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