POIPU — Protecting taxpayers from maintaining a state pension fund may take decades of commitment. That was the message from Gov. Neil Abercrombie to the attendees of the Employees’ Retirement System of the State of Hawaii Annual Investor Conference Luncheon
POIPU — Protecting taxpayers from maintaining a state pension fund may take decades of commitment.
That was the message from Gov. Neil Abercrombie to the attendees of the Employees’ Retirement System of the State of Hawaii Annual Investor Conference Luncheon Thursday at the Grand Hyatt Kauai. The first HIERS conference on Kauai since 2008 included more than 100 participants representing two dozen investment firms that manage assets for the state pension program.
A $1 billion turnaround from deficit to a surplus in three years will help fix negative financial ratings and help pay down unfunded liabilities.
“We have to stick with a plan to keep the recovery program working,” Abercrombie said. “We are going to restore fiscal discipline in this state.”
Kalbert Young, state director of Budget and Finance, there have been a number of milestones this past year for the retirement system.
There are 177,000 members in the HIERS system, with 67,000 active employees in state and county governments, another 44,000 retirees and beneficiaries, and 70,000 inactive, vested members that left government work and are eligible for lifetime benefits.
Since 2009 the state has been averaging around $1 billion a year in payouts, with 15,000 eligible workers who could retire today if they wanted to.
HIERS has $14 billion in assets as reports of the unfunded liability approach $22 billion. There is significant progress in closing that gap, he said, though it could take decades.
Reforms to curtail long-term liability include a hybrid general plan with limited pension benefits for new employees that became mandatory in 2012, he said.
