Indiana Teacher Pension Costs Almost Billion A Year

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Its no secret the Indiana Teachers pension fund is in rough shape. Many economic write ups through the years have given that one particular pension fund poor grades.

An editorial write up from IBJ.com threw out the idea of using some of the state surplus to back up the fund to alleviate some of the long term debt stress. You can read the entire article here.  I’ll provide a small snippet down below:

 

In fiscal 2014, the Pre-96 Account cost Indiana taxpayers a whopping $776 million out of the state’s general fund. The lottery kicked in another $30 million and the PSF added $110 million, for a total benefit payment of $916 million to teachers who retired before 1996. That’s a big “line item” number in the state budget considering Indiana’s general fund raises about $15 billion from taxpayers to run the state each year.

Nyhart, the actuarial firm for the state’s pension funds, projects that the annual retirement cost for Pre-96 teachers will peak in 2026 at $1.12 billion. The state intends to increase its general fund contribution to the Pre-96 Account 3 percent annually, which would allow it to meet those costs before the number of teachers begins to taper off after 2026.

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