02/26/2016
OVER $500,000 LOSS IN THE NEOGA CUSD TEACHER'S PENSION FUND IN ONE YEAR? WHAT'S NEXT?
Who's been talking about the exploding teacher's pension liability (retirement checks) at Neoga CUSD? How much will this cost local taxpayers going forward? Consider -
It's kind of backwards, but pension funds are often expressed in terms of their NET LIABILITY - that is, their retirement obligations minus their assets needed to cover them. So a positive number means greater obligations than assets to cover them. A negative liability means there are more assets than liabilities.
We haven't seen the figures for the end of Dec. 2015 yet. But the end of December 2013, the district had a negative liability of $169,000. SEE BELOW. Again that means the district had all the obligations to our teachers covered....it was a positive for the district, teachers and taxpayers. BUT, by the end of 2014 it plummeted to a positive liability of $349,500. That means a real liability.
This was a loss in the pension fund of $518,500 (-169,000 - 349,500) in one year. But worse, the district's own report (off their website) shows they are assuming a 7.49% rate of return on their investments. If they miss that by 1% they admit the fund will be $1,173,000 in the red, they report. But here's the problem. Their own report shows they only earned 6.0% on the fund in 2014. See where they earned $417,000 in investment income on a fund asset balance at the beginning of the year of $6,956,300. That is a 6.0% return. But they are assuming 7.49%
So does this mean they were at least $1,173,000 in the red last year? This is a massive swing in one year. How soon will the board be coming to taxpayers asking for help to cover their collapsing pension fund?
So many taxpayers can barely pay their weekly bills, let alone set aside for their own pension. Is this next?