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Worcester Pension Fund Rebounds is the headline in the Telegram. Year ending 2011, we had an unfunded liability of $339 million. Year ending 2012, we have an unfunded liability of $410 million. An increase in our liability of 71 millions is considered a rebound??
Granted we had a good investment return at 14.1% last year (2012), but the year before (2011) it was -.84%. The actuaries assume 8%, which I think is insane, and we averaged approximately 6.6%. We did not even meet the actuarial assumption of 8% the past two years.
Look at the "Unfunded Liability" which is the only number that really counts!!
The unfunded pension liability increased $71 million dollars. Let me say that again. We just got a 14.1% return on our pension funds and our liability increased $71 million dollars!!! The headline should be we just fell $71 million dollars more behind. This is not a rebound.
Over the past 6 years our pension liability has increased $290 million dollars. Let me say this again. On average our pensions system has fallen behind approximately $50 million per year. I will not even get into the health insurance unfunded liability!!
The City of Worcester will go bankrupt on this pension liability unless huge changes are made. You can believe what you want, say what you want, but numbers do not lie..
|Sorry this really scares the hell out of me.. No matter what you think about any issue. Please simply look at the numbers, they do not lie. This is unsustainable, unless huge changes are made.|
One caveat, I need to get a better understanding of this one line in the newspaper. "The greater than expected $70.6 million increase was primarily due to the final year of deferred investment losses going back to 2008."