How Big is Texas’ Pension Debt?
That’s right, pension debt owed by Texas’ state and local retirement systems grew to more than $86.1 billion in February 2020, according to the Pension Review Board’s latest actuarial valuation report. That’s a marked increase from the previous report (in October 2019) when unfunded liabilities totaled $3.4 billion less, at $82.7 billion owed.
Source: Pension Review Board
Soaring pension debt isn’t the only troubling aspect of Texas’ public plans, either. The funded ratio across all plans was 77.1 percent in February 2020, well below the ideal of 100 percent. That is down from the previous period’s 77.3 percent mark.
Assets and LiabilitiesSource: Pension Review Board
Also, 52 of the 99 plans monitored by the PRB had amortization periods exceeding the “recommended amortization period” of between 15 and 25 years. The PRB calls the amortization period “the most appropriate measure” for determining systems’ financial health.
Clearly, Texas’ public pension plans need significant improvement. So the question is, will Texas lawmakers implement the right solution before it’s too late?