Texas Sees Sharp Rise in Troubled Funds | Chief Investment O

Texas Sees Sharp Rise in Troubled Funds | Chief Investment Officer


State and local pension funds with ‘infinite’ amortization periods increased 50% from last year.
While the majority of the 99 state and local pension funds reporting to the Texas Pension Review Board (PRB) have held their ground during the pandemic, there was a sharp rise in the number of troubled funds from last year, according a report from the Texas Association of Public Employee Retirement Systems (TexPERS).
The PRB, which oversees all public retirement systems in the state, considers any pension fund with an amortization period of 25 years or less to be healthy and those with amortization periods of 40 years or more to be less healthy. And the most troubled, or least healthy, funds have so-called “infinite” amortization periods, which means they will never have enough money to pay the current and future benefits they owe. The PRB defines the amortization period as the length of time needed to pay for the unfunded actuarial accrued liability.

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