Unfunded Pension Liabilities

Texas has $86B in unfunded pension liability according to The Texan. This includes the liabilities in both the state and local government retirement systems. A description of the data acquired by the Texas Pension Review Board can be found here. The $86B unfunded liability is for 2019.

The City of Georgetown contributes to and uses the Texas Municipal Retirement System (TMRS) for its employees.

In total, the local public pensions in Texas have $20 billion in unfunded liabilities. This includes the $4.3 billion from the Texas Municipal Retirement System (TMRS), an amalgamation system for cities not big enough to finance their own independent pension systems. Cities that are part of the TMRS pay into the system just as they would their own. 

For the TMRS, the total in unfunded liabilities comes out to $18,082 per payee. 

Not including TMRS, the localities collectively owe $75,000 per payee.

At the end of 2018, the pension liability for Georgetown is $28,763,027 as shown below. Because of the mismatch in city fiscal years and calendar years, the 2018 data is the latest available.

It is likely that the liability increase for 2019 will be at least as much as the 2018 increase over 2017 of $11M. 

Notice that if the discount rate is decreased by 1%, the unfunded liability almost doubles to $53,054,358. The discount rate is basically the assumed rate of return of the investments. Based on stock and bond market performance this year, it is expected the unfunded liability will substantially increase when reported in 2022.

Of course this liability does not show up during any of the annual budget documents!

The City Council should be asked why they are not funding the retirement system such that there is no unfunded liability!