The Missouri public pension system currently faces serious long-term financial challenges, according to a new study released by the Show-Me Institute. The study’s author, Richard C. Dreyfuss, an actuary and pension expert, points out that Missouri taxpayers are facing compound problems regarding the state’s ability to manage effectively both defined benefit public pension and retiree medical liabilities. While current payments to retirees are not in jeopardy, the emerging cost patterns to both current and future members and taxpayers will be predicated upon future asset growth and favorable health care cost trends, both of which present significant risks to taxpayers.

The study, “Missouri’s Challenge: Managing Long-Term Employee Benefit Costs,” serves as a primer, and analyzes the financial position of the major public pension systems in Missouri. Dreyfuss compares the state’s public pensions to those offered by 18 major Missouri employers, considers the government regulations that partly shape pension practices, and provides and in-depth outline of the actuarial and economic variables that define the changing levels of both contributions and benefits over time.

Dreyfuss concludes that because, effectively, these employee benefits plans are highly political institutions, any reform efforts will prove difficult. Three important goals, however, should be to have benefit costs that are current, predictable, and affordable.

Related:

Four-page policy briefing that condenses the study’s arguments and analysis into a more digestible format.

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