Monday, June 22, 2009

"be careful about how much you delay"

Milford Daily News
Posted Jun 21, 2009 @ 11:40 PM

Last year's losses in the state's pension funds raise the possibility towns might have to contribute more to their retirement systems in the coming years to compensate.

There isn't necessarily a direct correlation, as many factors influence how much money a town spends annually to fund its pension obligations, and funds have more than 20 years to make up for their losses.

However, while pension systems' lifetime returns are still around where their officials expect them to be, losses from 2008 have left returns in the past 10 years well below projections.

"The more the pension system earns less than we expected, the more taxpayers have to top it off," said Steve Poftak, research director at the Pioneer Institute, a Boston think tank. "It gives one pause to see 10-year returns so far below the expected rate of return because the unfunded liability would be very large if you were assuming a 4 percent rate of return instead of an 8 percent rate of return. It's a big difference."

Read the full article on funding pension obligations in the Milford Daily News here

I disagree with "may". It is only a question of "when" that the pension obligations need to be funded. Franklin has not done much in this area of funding. The Town Council just authorized to spend $14,000 for a current actuarial analysis at the June 3rd meeting. The analysis is required every two years. Knowing what the analysis is is important, actually budgeting for it will be required some day soon.

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