DEL.ICIO.USGeorgia’s state pensions lose $11 billion in value
Funds for former teachers, state workers remain strong, reflect market volatility, officials say
The Atlanta Journal-Constitution
Thursday, October 23, 2008
The value of Georgia’s two major state pension programs has dropped more than $11 billion in the past 3 1/2 months as stock prices plummeted.
Those declines could help make it easier for state officials to defend withholding retirees’ cost-of-living raises next year.
The Teacher Retirement System and the Employees Retirement System pay pensions to about 115,000 former teachers, professors, school employees and state workers. Another about 380,000 Georgians are either paying into the plan or have in the past, but are not yet collecting a pension.
State officials said Thursday that as of earlier this week, the value of the teacher retirement fund had dropped from $50.3 billion on June 30 — the end of the last fiscal year — to $41.6 billion. The value of the employees retirement fund had fallen from $15.2 billion to $12.5 billion in that time.
System officials said the funds remain sound long term, and that the 17 percent losses over the past few months merely track what’s going on in the markets.
The Dow Jones industrial average is down 23.4 percent since June 30.
“We have the ability to ride out these downturns,” said Jeffrey Ezell, executive director of the Teacher Retirement System. “We’re concerned about it (the decline), but … we don’t get overly concerned because we invest in everything long term. It’s going to right itself. It’s going to get better.”
Pension plans across the country have seen double-digit percentage declines over the past few months as stock prices and other investments lost value.
The Georgia losses come at a time when the Teachers Retirement System Board is considering a proposal by Gov. Sonny Perdue’s administration to eliminate automatic cost-of-living increases that have been given since 1969.
State Auditor Russell Hinton, who chairs the ERS board and is vice-chairman of the TRS Board, said the panels needs the ability to make adjustments based on the financial soundness of the retirement funds. The proposal calls for the TRS board to vote on cost-of-living increases rather than having them take effect automatically. The Perdue administration came up with the proposal before the most recent stock downturn.
Retired educators are irate over the proposed change. They have flooded Ezell’s office, and the offices of TRS board members, with emails and letters protesting the proposal.
After hearing about the pension systems’ losses, James Camp, a retired college administrator from Covington, said he’s concerned about losing his cost-of-living increase next year.
“We depend on my income alone,” Camp, 59, said of his family. “This is important to me.”
Like other retirees, Camp is worried that the state may not only eliminate the COLAs, but reduce pensions.
“People should be concerned about what state government might do to the teacher retirement fund,” he said.
The big short-term losses shouldn’t be surprising, state officials said.
The pension programs are exposed to the whims of the market, like other investment plans. In general, the investments have been fairly conservative, with much of the money in index funds. Retirees criticized lawmakers earlier this year for pushing legislation they said would have allowed the plan to make riskier investments. The bill stalled in the House.
Dan Ebersole, director of the Georgia Office of Treasury and Fiscal Services, said the state’s investment strategy has allowed the pension programs to post strong gains in the past.
But the state pension systems weren’t shielded from the collapse that brought down major financial firms. For instance, the systems lost about $234 million on insurance giant AIG, which was bailed out by the federal government.
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Comments
By wanda
Jun 22, 2009 11:37 AM | Link to this
How about all those employees who are not teachers, for years we were not given raises and our insurance premiums increased. This Gov. Curley the stooge ( I like that) is now treating all employees the same. He's gonna take away everything he can from all of us. Does anybody really think the reason he wants to separate teachers insurance from the rest of the state retirees is to give us better insurance? No, it is so he can eliminate the "rest of the state retirees" insurance and keep the teachers until he can figure out how to shaft them without them striking. We better all stick together and just be "State retirees" not teachers and other.
By Old English, French, and Japanese Teacher
Oct 25, 2008 2:56 PM | Link to this
Old Sonny is what he was and has been since a MINORITY of Georgians elected him the first time. He told us we'd vote on the Georgia State flag, remember? Well, he changed the flags we could choose to kiss up to his Big Money Friends in Atlanta and we ended up with a silly mess and never had the chance to vote on THE FLAG on which he ran, and trampled. Then there was the silliness of stopping school buses and closing schools during the first gas shortage. Remember that? Great leadership. Oh, and then he hopped his jet and flew off to avoid the long gas lines most recently! Now he wants to mess with the retired teachers' funds that were take from us without our having a choice, in my case, for over 30 years of underpaid, 60-80 hour work weeks, including no-pay planning and working weekends, summers, and all hours of the evening calling students and parents about school business. The money is not his, but that's never worried him or his fellow-thieves of both parties. I guess, to sum up, as a Vet, and I do not mean a VETERAN who honorably served, but an animal Vet, he spent many hours with his arm up some cow's butt, and he thinks that's what he's supposed to do to voters and citizens. Especially while he continues to toady up to the rich folks he's always wanted to be. Looking at his miserably existence, we can all feel better. Hey, Gov, why not just cut out health benefits for retired teachers, let 'em die quicker, and save more retirement funds for you and your Rich Friends to play with? Oops! Shouldn't give ideas like that to a former veterinarian. They're used to putting others out of their misery, for money, of course. Well, you'll be remembered, all right Governor, but not with honor, truth, justice, caring, concern; none of those words have a relationship to you and your cronies. Relief is the only word the average Georgian will remember when you are finally gone from office -- to Washington, since you've kissed up to those folks so well, or Europe, since you prefer staying there while Georgia needs real leadership.
By vlk
Oct 25, 2008 12:17 PM | Link to this
Sonny Purdue continues to hack away at benefits that were promised to State workers. When you work for the state as a member of the rank and file workers (probably 95% of the state positions) you make perhaps 85% of market pay. You take a less than rate of pay because you look to the future of a guaranteed retirement and health benefits. I know I took a large cut in pay to go to work for the state, worked 11.5 years and made sub-rate pay the whole time. I watched my benefits become diluted and paid more and more for insurance. I left the state, hoping to go back later with more education. How many more will leave as they find rich old Sonny pickpocketing their retirement funds?
By Laura Hardwick
Oct 24, 2008 5:02 PM | Link to this
Will our goverment officials who serve receive this treatment also?
By Reality
Oct 24, 2008 12:36 PM | Link to this
Dear Residents of Georgia:
Let's take all of the teachers' retirement money away. Who needs them anyway?
Elect Obama...he'll make sure that everyone gets a part of the greater wealth!
PS:....but don't take my helicopter, UGA tickets, 10 million property at Oakey Woods, the land at Disney, trips to Hong Kong and Spain....
PSS: Oh, I am confused....vote for ME for President.
Signed-
The Honorable Sonny P
"This message is approved by House Speaker Richardson and is not intended to make any sense."
By Grumpy
Oct 24, 2008 12:12 PM | Link to this
Hey, Ron, if you think state employees are a bunch of whiners over their pensions and the COLA commitment made to most of them prior to 1982, then, by all means, let ERS know you don't care what kind of a pension you get. Are you mental? Maybe you think it was just okay to get underpaid for comprable work in private industry for 30+ years and that the state shouldn't be held to their agreements, and it's okay for any two-bit politician to make a bname for him or herself to take what's noty theirs to take, but some of us feel different.
While you're on your knees groveling about us "whiners," why don't you let the Social Security Administration and Medicare know that you're no whiner so, by God, they don't have to give you any benefits THAT YOU'RE ENTITLED to that you've earned?
If the current political leadership in this state had its way, you wouldn't even receive your pension.
By Ron
Oct 24, 2008 11:28 AM | Link to this
It seems that our beloved State employees are downright whiners about receiving a COLA...hey, here's a PEPSI, drink it..it tastes better.
We have to do what is necessary in this economy so whiners, back off, and be apart of a good thing to help Georgia with their issues. As a ERS employee who will be retiring in 2009, I'm not concerned about COLAs or PEPSIs, I'll drink Sweet Tea.
Thank God for Georgia.
By wjtsf
Oct 24, 2008 11:01 AM | Link to this
Maybe, just maybe, if the State employees under ERS paid the same 5% of salary, instead of their 2%, into ERS as the Teachers and Regents' employees must pay into TRS then ERS would be better funded. At the same time, just maybe, if State employees got only 8 hours of Sick Leave per month like teachers and Regents' employees, instead of the 10 hours per month they get, that can be applied as additional service time for retirement then the ERS and the state budget would be a little better funded and managed.
By Jim Campbell
Oct 24, 2008 10:58 AM | Link to this
People everywhere are afraid about many different things, seemingly with good reason. Consider alternatives and the possibility that both your personal and financial life truly could be in your own hands . Know that. Believe that. www.LikeSoup.com
By Janet
Oct 24, 2008 10:27 AM | Link to this
I am a current state employee. While teachers are an important part of the system, state employees have not received the same raises as teachers for years. Teachers receive more than regular s.e. and also receive their COLA each year plus some even receive supplement pay from the county which they work. I say make it the same for everyone that is employed by the state, ie. judges, DAs, S.E. teachers, etc. Fair is fair and from what I've seen in the schools (have children in the school system) they prepare for only the CRCT's and nothing else all year. After the CRCT testing in April, they coast the rest of the school year. Our children need to receive an education where they don't have to take remedial classes in college......
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