Teacher retirement funding problems may be a harbinger of things to come for many professionals and working people across America. The North Dakota teachers’ retirement fund has an unfunded liability of almost $600 million, according to Fay Kopp, deputy executive director of the North Dakota Retirement and Investment Office. The fix would require an infusion of $500 million to $600 million.
Why the tremendous deficit? Like almost every retirement fund across the country, the state-run Teachers’ Fund for Retirement, or TFFR, took a massive hit from the stock market meltdown and massive investment losses. According to Kopp, the fund, a qualified defined benefit public pension plan, is projected to run out of money by 2033 if the situation remains unchanged.
“What we’re trying to do is urge our members to stay calm, urge the public to stay calm because it gets to be a very emotional issue,” said North Dakota Education Association Executive Director Greg Burns. “We’re all trying to find a way to share the pain. What that will be we don’t know yet.”
Some possibilities the board is exploring include:
· Asking the Legislature for one-time funding.
· Cutting benefits.
· Increasing contributions.
· Raising the teacher retirement age.
“Right now, the fund is solid, so there’s no problem with paying out benefits,” said Jamestown Superintendent Bob Toso, a trustee on the TFFR board. “But if we don’t do something, there’s going to be a heck of a problem in the future.”
Many experts are paying close attention to this and similar situations across the country because they may be a bell-weather of retirement funding shortfalls facing many millions of future retires across the spectrum of jobs across America.
For additional information about North Dakota teachers’ retirement, see Kelly Smith’s article on Inforum.