JEFFERSON CITY - Several pension plans are found to be underfunded in a state auditor's report released Tuesday.
State Auditor Tom Schweich's report looked at 89 public pension plans that cover 546,000 past state or local governmental employees. The report found the plans to be underfunded by $16 billion.
His audit singled out 15 plans that a deputy described as being on a "watch list."
Among those singled out were pension plans for employees of the Highway Patrol and the state Transportation Department along with local government worker plans in Kansas City and St. Louis.
The audit cited two problems -- the national economic recession that had lowered the value of investments held by retirement systems and failure to require a high enough contribution from either workers or government agencies to assure financial stability.
"If the actuary says to the trustees of the plan: you need to make a $10 million contribution for the year in order to keep it well funded and you make something less than that, that would kind of tend to bring you to the poor side. Or, if your investments are doing so poorly and it's not growing, the plan isn't growing or keeping above a certain investment size so that's got future liabilities funded, that would drag you into a watch list position," said Harry Otto, deputy state auditor.
Actuaries are responsible for figuring out how much money should be put into retirement plans each year to ensure their longevity, but the government agencies do not always follow those recommendations.
According to the report, about 40 percent of Missouri pension plans received less than the full required contributions suggested by the actuaries.
Otto said Missouri pension plans are better funded than the national average. "Missouri, the way we computed it, about 78 percent compared to a national average of about 74 percent, so we're better than the national average, these 89 plans that we looked at as a group they are, but then some of them within the group are not at the average. They're somewhere below that," Otto said.
A "relatively healthy" pension plan has a 78 percent or higher funded ratio contribution and a 100 percent actuary required contribution.
Pension plans are able to be placed on a "watch list" if the plan does not meet a 95 percent required contribution or a 70 percent funded ratio, Otto said.
The auditor's office does not have a plan in place to make sure the plans are being funded, Otto said. He said he thinks public awareness of the issue will bring "considerable interest to see that these plans are well funded going forward."
The auditor's office cited 15 pension and retirement plans on the "watch list":