Teacher pension $hortfall
The city’s teachers pension plan is under-funded by as much as $36 billion — more than twice official estimates, according to a new report.
The Manhattan Institute study found that teacher-pension systems across the nation are under-funded by $484 billion because their managers have overestimated investment returns.
The plans are guaranteed by taxpayers no matter how funds perform.
The failure of pension systems to account for the recent stock-market plunge in their balances boosts the funding shortfall by an additional $116 billion, the study says.
The crux of the problem is that most public pension plans — including New York’s — guarantee a hefty 8 percent return on their investments, according to the study.
By contrast, most private pension funds anticipate a 6 percent return.
Applying the more conservative estimate of returns — and factoring in stock-market losses — reveals just 46 percent of the city’s pension plan is accounted for, the study found.
