The stock market’s whims are particularly important to the Public Employees Retirement System, as investment earnings account for 55 percent of its massive revenue over the past 30 years. The stock market’s decline can have an effect on the state pension plan, which provides retirement benefits to state employees, teachers and staff at universities and community colleges, as well as local government workers. Ray Higgins is the executive director at PERS. He said that he and his team are closely watching the stock market. Higgins stated that PERS felt the effects of recent events in a similar way to other retirement systems, pension funds and investors across the country. We are keeping an eye on this situation, but we are long-term investors who are focused on the future. We will continue to manage our portfolio in accordance with our strategic asset allocation through this event as well as every other. We are focusing on investments as well as the time-sensitive and critical work of the PERS System.” PERS has 61 percent funding at the end of 2019. This means that the PERS system has 61% of the assets required to pay all benefits, from new hires to retired workers. The total funding gap is $17 billion. PERS is not in danger of going bankrupt anytime soon. The assets of the system are approximately $28 billion. The state would have to pay a lot if there were any problems. PERS’ governing board has been trying to reduce its unfunded liabilities, with the aim of achieving near full funding in a period of 30 years. Pension plans are long-term investments. The board increased contributions from employers to pension plans, including state agencies and local government, from 15.75 percent per employee to 17.4. This small increase costs state and local governments (including education entities) an additional $100 million each year. The system pays 9 percent of employees’ salaries towards their retirement. In the 2000s, it was raised from 7.25 percent to 9 percent. The plan provides an average annual benefit of $24,400. Despite increases in contribution rates, and what was essentially a booming stock exchange until recently the total funding level has generally decreased from 74 percent in 2007 before the so-called Great Recession to 61 percent today. In recent years, it has hovered at 61 percent. One reason is that a growing retirement population means a more aging workforce. In the 1990s, when the plan was especially well-funded, legislators increased benefits to public employees. On the federal level, efforts to reduce Social Security benefits are often called the third rail of politics – a metaphor that refers to touching the third rail on an electric train system that can cause electrocution. At the state level, attempts to reduce the benefits of the Public Employees Retirement System (PERS) have been seen as that third rail. Politicians ignore the issue at all costs. The 2000s saw the creation of a commission to examine PERS by the then-Gov. Haley Barbour, a Republican created a commission to examine PERS. Barbour was popular at the time and believed that he could reach the third rail. The commission recommended that the annual cost-of-living component of the system be frozen. The cost of living would be changed from the current 3 percent annual increase to an inflation-based increase. The Legislature did not take these recommendations seriously. In fact, the 2011 Republican legislative candidates signed a pledge not to take any action to reduce PERS benefits. People affected by PERS make up a significant voting bloc, or 12.5 percent of the state’s workforce. The PERS system includes current and retired employees as well as other employees who once worked in the public sector, but now do not. Some believe that the governing board has implemented policies and made changes to ensure long-term viability. However, recent stock market drops have made it difficult for those who manage the system and others who work with the system to swallow. Politicians don’t want to be forced by economic circumstances into touching that third rail._x000D