US - The Retirement Systems of Alabama (RSA) faces severe strain as a result of spiralling pension and health insurance costs.
David Bronner, CEO for RSA’s Advisor publication said that although Alabama’s pension funding status was better than most of its counterparts, preliminary budget figures indicated a serious problem lurked when budgets effective for October 2006 are submitted in January.
RSA oversees the Alabama Teacher’s Retirement System; Judicial Retirement System and Employees Retirement System.
According to Bronner, TRS’ unfunded liabilities almost doubled from US$1.2bn in fiscal year 2003 to $2.2bn in fiscal year 2004.
“Preliminary budget figures indicate a serious problem for Governor Bob Riley and the Alabama legislature when the return for the Regular Session in early 2006,” he said.
During that time, pension costs for the TRS are expected to rise nearly 17% to $506m.
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