Texas’ public pension fund set to go broke

Public pension funds across the country are in shortfall.The Associated Press is calling it the “global retirement crisis.”

European and Asian nations, all the way to smaller municipal governments in the U.S. are struggling to find a way to fund the retirement packages they promised their public servants.

“The [Employees Retirement System of Texas] is one the best in the country. But, this is an issue that we know we’re going to have to deal with at some point,” said State Sen. Jose Rodriguez, D- El Paso.

Covering state workers and elected officials, the $23 billion fund could be bankrupt by 2052, a harsh reality for its 321,000 state employees, 400 of which reside in El Paso.

“Its not a burning issue in the Texas legislature, although we are looking into way to ensure it remains solvent,” Rodriguez said.

Solvency for the $116 billion Teacher’s Retirement System became a reality last year, but it didn’t come without sacrifice.In Austin, legislators compromised, deciding to raise the age of retirement from 60 to 62 and require school employees to make bigger contributions, from 6.4 percent of their pay to eventually 7.7 by 2016.

Legislators from the El Paso delegation will be considering these options, as well as privatizing the system by switching to a 401(k) plan, or separating law enforcement from the rest of state employees.

This is the new reality for post-WWII generations, according to the AP, who calls it the “demographics disaster” as retirees live longer and falling birth rates mean there will be fewer workers to support them.

But Rodriguez says in Texas, state workers shouldn’t have to bear the burden.

“They don’t get paid as much as they would in the public sector,” Rodriguez said. “So one of the benefits that’s provided to them is a good retirement. So I hope we maintain that. I certainly will work for that in the future.”

State Rep. Naomi Gonzalez agrees. She told ABC-7, “Texas is in better shape than other states. But next session, we’re going to have to deal with the retirement fund.”