The most substantial improvement in the 2015-16 period occurred among three pension systems moving out of the infinite amortization period, from 7 to 4. This follows a dramatic improvement of 8 fewer pensions in this category in the prior year. An infinite amortization period means that there will not ever be enough funds to pay future benefits.
In addition, five more pension systems attained the PRB's recommended status of amortization periods of 25 years or less, setting another six-year record of 39 pension funds achieving this feat.
TEXPERS executive director Max Patterson said: "These amortization period trends matter more than accountants' moment-in-time snapshots of unfunded liabilities when assessing pension fund health. We maintain that Texas pension fund Trustees and staff can, with time, make necessary adjustments to improve upon various measures of performance. As long as the key ingredient of appropriate funding is provided by their employer, we will continue to see ongoing improvements to amortization periods.
"This positive trend for amortization period should be put in perspective. Stock market performance in 2015 was the worst in seven years and left a lot to be desired. As 2016 market performance has recovered well, we think this amortization period improvement trend will continue. Texas lawmakers should, with confidence, maintain the status quo going into the next legislative session," Patterson said.
The Texas Association of Public Employee Retirement Systems (TEXPERS) is a statewide voluntary nonprofit association which provides quality education to trustees, administrators, professional service providers and employee groups and associations engaged or interested in the management of public employee retirement systems.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/texpers-report-texas-state-and-local-pension-funds-reach-6-year-pinnacle-of-financial-health-300317361.html
SOURCE Texas Association of Public Employee Retirement Systems