Do you have an extra $45,689 for you and every member of your family (including kids)? That’s your share of the shortfall in Alaska’s unfunded public pensions.
Alaskan Win Gruening writes in MustRead Alaska about the looming unfunded liability of Alaska’s government-sponsored pension funds. The data he presents, from an American Legislative Exchange Council report entitled Unaccountable & Unaffordable, is daunting.
In 2006, the state took steps to mitigate future damage by putting all new hires into a defined-contribution plan (similar to a 401k) rather than the legacy defined-benefit plan (which provides a set dollar pension monthly). So while financial liability for new hires will be less, the state is obligated to fund billions for the retirement plans of those who were already vested in the defined-benefit plan.
This unfunded pension issue is something very few elected leaders are talking about. The clock is still ticking, and our debt persists. In the future, all Alaskans will be “impacted when pension costs absorb limited government resources, rather than core government services such as education, public safety, and roads.” It’s time to have the conversation.