While pension experts typically prefer to see the ratio above 80 percent, it’s an improvement from recent years, and Georgia’s pensions are stronger than similar retirement systems in many other states.
Lawmakers approved pumping an extra $200 million into the teacher system this fiscal year, and Deal is seeking to add $361 million more next year.
”Where my concern is, is where is the stopping point going to be,” state Rep. Howard Maxwell, R-Dallas, the former chairman of the House Retirement Committee, said during a budget hearing this week.
TRS officials say they expect the size of the extra payments to decline in coming years as part of a plan to improve the long-term stability of the pension program.
But for now, some officials say it cuts into the state’s ability to fund other things, such as pay raises for teachers.
Deal’s chief of staff, Chris Riley, said bond rating agencies that help determine what the state will pay when it borrows money would frown on Georgia ignoring the need to shore up the system.
“As long as we require this rich of a program with our retirement system, we will always be required to shore it up and infuse it with money,” he said. “We will always be on the hook for ensuring this TRS system is fully funded.”
Teachers say the money is worth it to the state because the pension system is a great recruiting tool that attracts educators and keeps the best on the job for decades. Some lawmakers, on the other hand, would like to see the state offer portable 401(k)-like plans for new teachers rather than solely pensions, which guarantee a monthly income for life.
The teacher retirement system had 84 percent of its pension liability covered in 2014. At the end of 2016, that had fallen to 76 percent.
Both the TRS and ERS have been hurt by poor stock performances in past years, but a strong market in fiscal 2017 provided a boost.
In addition, the TRS has suffered from fewer teachers and university staffers paying into the system and a rising number of retirees receiving pension checks.
The teacher system had 447,000 active members and more than $70 billion in assets at the end of fiscal 2017. Many of its biggest stock holdings are in the tech industry.
As of the end of the fiscal year, the biggest single stock holding for the TRS and the ERS — in terms of the value of the stock — was Apple Inc., with $1.09 billion worth of shares. Alphabet Inc., the parent of Google, came in second at $962 million in shares, followed by Microsoft, Amazon and Facebook.
Alibaba, the Chinese e-commerce, retail and tech company, ranked among the top 20 TRS holdings at $353 million worth of shares.
Two companies dropped out of the top 10 stocks for the teacher retirement fund: pharmaceutical giant Pfizer and energy company Chevron.