The unfunded liabilities of the state’s public pensions are an economic ticking time bomb. As of June 30, 2014, the Missouri State Employees Retirement System alone has more than $2.8 billion in unfunded liabilities and is only 75.1 percent funded. There is good reason to believe that the plan’s unfunded liabilities are even larger than the amount reported by MOSERS. Because of these liabilities, the state faces a significant risk, and policymakers may be forced to make drastic cuts to services or significantly raise taxes in order to meet the state’s pension obligations. The risk posed to Missouri’s financial wellbeing is a real and serious one.
HB 485 seeks to address this problem by shifting new hires into a hybrid pension plan. A hybrid pension plan is one that contains elements of both a defined benefit (DB) plan and a defined contribution (DC) plan.
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