NEW: Annual Costs of State Pension Funds to Go Up

NEW: Annual Costs of State Pension Funds to Go Up

The state retirement board today approved changes to the state pension system that will require that the state and local communities pay far more into the retirement funds for their employees.

On an annual basis, the state now will owe $246.5 million annually to the pension fund, starting in 2013, up from $182.5 million. That represents an increase in the contribution rates from 26.55 percent to 36.34 percent.

The total amount that schools districts have to contribute to teacher pensions also went up by nearly the same rate. In 2013, districts will owe a total of $375.3 million to the fund for teacher pensions, up from $282.8 million.

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The changes are the result of two actuarial studies—one of the teacher and state worker pension funds that was released last month, the other of a study of the state fund for municipal workers, which was released today. The first study showed that the unfunded pension liability had grown by $1.4 billion, from about $5.3 billion to $6.8 billion.

The contribution rates will also increase for cities and towns, but by varying rates depending on which community.

DEVELOPING….

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