Alaska governor unveils plan to reduce unfunded pension liability

Reuters

SAN FRANCISCO, Dec 5 (Reuters) - Alaska Governor SeanParnell will urge in his fiscal 2015 budget plan that the statetap $3 billion in one of its savings accounts to pay down acombined $11.9 billion unfunded liability in Alaska's twolargest pension funds.

The proposal would also allow Alaska to reduce its annualcontribution to its Public Employees' Retirement System andTeachers' Retirement System to $500 million a year from thisyear's $600 million and raise the funded status of the twopension funds by 10 percent almost immediately, Parnell's officesaid in a statement released on Thursday.

The Public Employees' Retirement System is currently 63percent funded and the Teachers' Retirement System is currently53 percent funded.

Parnell's plan comes at a time of increasing concernnationwide about the cost of public pensions and the overallfinancial health of retirement systems for public-sectoremployees.

Illinois Governor Pat Quinn, a Democrat, on Thursday signedinto law long-awaited reforms to his state's public pensionsystem, which is underfunded by nearly $100 billion.

"Given the significant and escalating resources required topay down the unfunded pension liability, it is in Alaska'sinterest to dedicate some of our budget reserves now to payingdown our obligation, and move the state's annual payment to alower, more sustainable and predictable level," Parnell, aRepublican, said in a statement.

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