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Our Opinion: Cause for concern?

Our Opinion: Cause for concern?

December 6th, 2018 by Central Missouri Newspapers in Opinion

The good news? The Missouri State Employees Retirement System, known as MOSERS, lowered its expected rate-of-return on investments earlier this year. That means the fund is being more conservative with its anticipated earnings, which are partially in the stock market.

That's always a good thing, because the stock market is somewhat of a gamble. We don't think of it that way in a bull market, but when investors get taken on a roller-coaster ride (like they have this fall), we start hearing more about "capital preservation" — even pulling money out of the market.

Fortunately, history suggests that time will flatten out that bumpy ride and eventually lead to gains.

The bad news? Because MOSERS has lowered its expected rate-of-return, the state will be asked to kick in more money for the retirement system.

How much? About $65 million next year, outgoing state Sen. Rob Schaaf, R-St. Joseph, estimated during this week's meeting of the Legislature's Joint Committee on Public Employee Retirement, which would bring the total annual state contribution to about $445 million. Even in a multibillion-dollar state budget, that's a good chunk of change.

The final number likely will be different by the time lawmakers pass a budget and send it to Gov. Mike Parson next May.

"I think we need to, always, be concerned," Rep. Nate Walker, R-Kirksville, told the News Tribune this week. "But, I think in most ways, the Missouri state retirement systems are in pretty good shape."

True, Missouri's state employee retirement system is in better shape than some other states, such as neighboring Illinois.

Taking another $65 million from the state budget to fund MOSERS likely will have some people questioning why we still give state employees a pension — something the private sector long has abandoned in favor of cheaper retirement programs such as the 401(k).

But the state pension is one of the few remaining benefits that attracts people to government work in Missouri, where salaries alone often aren't competitive with the private sector.

So the question becomes: At a time of record low unemployment, which favors workers, can the state risk eroding another benefit to its employees?

Central Missouri Newspapers