There has been a lot of PERS news in the last couple of weeks. As initially reported on Jackson Jambalaya, PERS funding has dropped to 58%. The rate of investment return for 2012 was only 0.6%
Kingfish notes that this leaves both the 5 year and 10 year averages below the assumption of 8%. Missing the assumption means funding shortfalls.
As a result, the NEDJ taxpayer costs of PERS will increase by $44 million next year. The NEDJ article notes that the Legislature has taken steps to prop up the system in recent years:
In recent years, the Legislature already has taken some steps to prop up the system, such as increasing the employees contribution rate from 7.25 percent of their salary to 9 percent and slightly reducing the benefit package for new hires. Under the change, a new employee beginning in July 2011 will have to work 30 years or until age 60 to be eligible to retire. Employees hired before then only have to work 25 years to draw full state retirement.
Those are logical steps to implement.
Similar action to raise the participant age needs to be taken to Medicare and Social Security in order to address the problems with those programs. Like it or not, we are going to have to raise the age to participate in Medicare and collect social security retirement benefits in order to offset costs associated with longer life spans.