Atlanta Pension Plan Shortfall

AJC, 1/16/19, page A1 uncovered a shortfall in the City of Atlanta Employee Pension Plan funding with unfunded liabilities at $580 million on the $1.2 Billion fund that covers 3,889 retirees and 3,688 active employees.

This Atlanta City Employee Pension Fund assumes a 7.25% rate of return, inflation at 2.25% and payroll growth at 3%. Plan assets for this plan have been invested by Globalt Investments.

The City of Atlanta has voted to consolidate this Pension Plan with the Pension Plans for Police and Fire to get better oversight of investment results. This would become a $3 billion combination of funds.

See: Public kept in the dark about city pension performance at:

https://www.pressreader.com/usa/the-atlanta-journal-constitution/textview

Comments

This is amazing. $580 million is 48% of $1.2 billion.

This is a shock, because the stock market has delivered returns of 33% over the past 2 years. Government Employee Pension Plans have been reporting shortfalls across the country for some time.  I suspected that this particular government pension plan is full of low-yield bonds invested with political cronies.  These defined benefit pension plans are a really bad deal.

They would have done better in the Vanguard 500 index with a 401K plan that is owned by the beneficiary and goes to their families when they die. Pension plans just stop paying.

Norb Leahy, Dunwoody GA Tea Party Leader