Tuesday, March 31, 2009

TN Taxpayers to make up pension losses

To replenish the weakened accounts, Gov. Phil Bredesen proposes to boost state contributions to the Tennessee Consolidated Retirement System next year by $150 million. School boards and counties whose employees also participate in the state’s retirement plan must make similar increases.

Hamilton County Finance Director Louis Wright and Chattanooga Finance Director Daisy Madison said Monday that city and county budgets next year must include extra money for employee retirement programs. Both said it is still too early to calculate how much of an increase will be needed to offset recent investment losses.

Most private sector workers won’t be as fortunate, however.

According to the Employee Benefit Research Institute in Washington, D.C., a majority of workers in the private sector no longer have guaranteed benefits at retirement through defined-benefit pension plans as so most government workers. While employers contribute to individual retirement accounts through instruments such as 401(k) plans, the benefits available at retirement depend upon investment returns.