N.D. teachers’ retirement: State funds hit hard by economy, being watched closelyFargo and other North Dakota school districts are closely watching the fate of the state teachers’ retirement fund. It may shape up to be the state Legislature’s top issue in 2011. Like retirement funds across the country, the state-run Teachers’ Fund for Retirement, or TFFR, took a hit from the market meltdown and massive investment losses.
By: By Kelly Smith, Forum Communications Co. , The Jamestown Sun
Fargo and other North Dakota school districts are closely watching the fate of the state teachers’ retirement fund.
It may shape up to be the state Legislature’s top issue in 2011.
Like retirement funds across the country, the state-run Teachers’ Fund for Retirement, or TFFR, took a hit from the market meltdown and massive investment losses.
The fund has an unfunded liability of nearly $600 million, said Fay Kopp, deputy executive director of the North Dakota Retirement and Investment Office. That means to fix it would require an infusion of $500 million to $600 million.
Because that’s unlikely to happen, officials need to come up with a solution by April, which may involve appealing to the state, school districts and teachers to increase contributions.
The fund, a qualified defined benefit public pension plan, is projected to run out of money by 2033 if the situation remains unchanged.
“While we would like to wish that positive investment returns in the future would return it back to where we’d need to go,” Kopp said, “most of the projections show that’s unlikely to happen.”
Officials say whatever solution is recommended could have a big effect on school districts, teachers and taxpayers. That’s why officials are now trying to minimize teacher panic and public outcry.
“What we’re trying to do is urge our members to stay calm, urge the public to stay calm because it gets to be a very emotional issue,” said North Dakota Education Association Executive Director Greg Burns. “We’re all trying to find a way to share the pain. What that will be we don’t know yet.”
The TFFR board has to present a recommendation by April to the Legislature’s employee benefits programs committee. All changes require legislature approval.
The board has explored asking teachers and school districts to increase contributions by 2 percent each biennium, or $1 million each biennium.
Because that would come out of teacher compensation, teacher salary raises could be affected.
“It’s going to have a depressing effect on the amount of money that’s available for compensation increases,” said Fargo Superintendent Rick Buresh. “When you have $2 million pulled out of the picture, it’s got to come from somewhere.”
Raising the teacher
“That’s one of the issues that we’re looking at,” said Minot teacher Mike Gessner, TFFR board president. “Obviously, there would be savings because you would be paying in longer and you would receive checks for less time.”
The board meets March 16 to decide on what recommendation it will present in April.
Whatever solutions the Legislature ends up considering, officials say, retired teachers won’t be affected.
“Right now, the fund is solid, so there’s no problem with paying out benefits,” said James-town Superintendent Bob Toso, a trustee on the TFFR board. “But if we don’t do something, there’s going to be a heck of a problem in the future.”
Kelly Smith is a reporter for
The Forum which is owned by
Forum Communications Co.