Omaha Public Schools will need $15.5 million to make up a deficit in its pension plan. That’s according to a recent article in the Omaha World Herald.
Robert Klausner is the Principal of Law Firm Klausner, Kaufman, Jensen & Levinson, out of Plantation, Florida.
Klausner says his firm represents about 150 state and local government retirement systems all over the US. He says OPS’s struggle is multi-faceted.
One of the issues is they’ve had unfavorable investment performance in the last couple years.
The other big issue is that the fund has not received the full actuarially-required contribution for half of the last 12 years.
Klausner says the deficit came up after the most recent valuation. There was a $15.5 million difference between the assets’ actuary value versus their actual value in the marketplace.
The state has taken some corrective measures in this..
"Number one, the employer didn’t used to have to pay the full required contribution, they just paid X whatever X was and now they have to pay the full freight. The other thing that’s been done is the assets have been transferred for investment purposes to the Nebraska Investment Council.”
Klausner says the Nebraska Investment Council has a larger pool of money to work with so they have more options in terms of investments.
He says in Nebraska, the right to receive your pension is constitutionally guaranteed.
Klausner says these are basically deferred wages for school teachers and other school personnel and so the deficit will have to come out of OPS’ budget.
But he does expect the plan to be just fine in the long run thanks to the state’s corrective measures.