HONOLULU — The state’s unfunded liability for its public pension plan is growing, but the amount of time that actuaries predict it will take to get out of the hole shrank slightly. ADVERTISING HONOLULU — The state’s unfunded liability for
HONOLULU — The state’s unfunded liability for its public pension plan is growing, but the amount of time that actuaries predict it will take to get out of the hole shrank slightly.
The new estimates were part of an independent analysis by Dallas-based Gabriel Roeder Smith & Co., the Honolulu Star-Advertiser reported Tuesday.
The report said it will take the Hawaii Employees’ Retirement System 26 years to become fully funded. That goal will be reached in 2040, instead of last year’s prediction of 2041.
The $14.1 billion pension plan provides retirement, disability and survivor benefits to more than 118,000 people. Its unfunded liability stands at $8.58 billion, up from $8.48 billion last year.
The reduced time frame for paying down the liability is due in part to strong investment gains over the last two fiscal years. The fund saw a 17.8 percent investment gain in the year that ended June 30, which followed a 12.3 percent gain the preceding year — both well above the annual target of 7.75 percent.
Changes under former Gov. Neil Abercrombie also helped. The level of overall benefits dropped for new members, and the amount that employees and employers are required to contribute to the system increased.
The Legislature also passed measures to eliminate and reduce for new members the availability of pension spiking, a practice in which employees work a lot of overtime toward the end of their careers to significantly boost their retirement benefits. For an existing member, an employer has to cover pension spiking after the employee retires.
