Governor Mitch Daniels today announced how $360 million will be split among five employee pension funds, their share of the proceeds from the first automatic taxpayer refund, the governor's plan to return taxpayer dollars to Hoosiers when the state's reserves exceed a certain threshold.
"Many pension funds in other states are headed for massive defaults, but not here. Our state police, conservation, excise and gaming officers, judges, prosecutors and teachers deserve rock-solid, retirement security in return for their dutiful and often sacrificed public service. Indiana's pension funds, among the best-funded anywhere, are now in even better condition," said Daniels.
The $360 million the pension funds will share is half of the budget surplus. The other $360 million will be returned to taxpayers when they file tax returns in 2013. The refund will be in excess of $100 for a single filer or $200 for a joint return. The exact amount will be determined later this month.
The five pensions and contribution amounts are:
Judges Pension Fund, $90,187,160
Conservation, Gaming, and Excise Officers' Pension Fund, $14,619,112
Prosecutors' Pension Fund, $17,363,392
State Police Pension Fund, $31,674,103
Pre-1996 Teachers' Retirement Fund, $206,796,233
Indiana closed the 2012 Fiscal Year with reserves of $2.155 billion or 15 percent of the state's budget. In 2011, the Indiana General Assembly approved the governor's plan for an automatic taxpayer refund if the state's reserves exceeded 10 percent at the end of the budget year that ended on June 30. In future years, the reserve threshold will be 12.5 percent.
Indiana fiscal facts during the Daniels' administration:
Indiana has its first Triple-A credit rating
Indiana's expenditures have grown at less than one-quarter of the rate of the previous decade
Indiana has the fewest state employees per capita in the country
Indiana has paid down previous debt 46 percent
Indiana repaid more than $750 million of debt previously owed to schools, universities and local governments
Indiana repaid a $63 million loan to the Motor Vehicle Highway Fund that originated in the 1990s
Indiana paid off the 50-year-old bonds on the Indiana Toll Road, almost $200 million worth
Indiana has the third lowest debt per capita for state governments (State Budget Solutions, August 2012)
Indiana has the second lowest debt per private sector worker (State Budget Solutions)
Indiana has the third lowest debt as a percentage of gross domestic product (State Budget Solutions)
Indiana has the lowest burden per household to fully fund public pensions in the country (The Revenue Demands of Public Employees Pension Promises," Robert Novy-Marx, University of Rochester and NBER and Joshua D. Rauh, Kellogg School of Management and NBER, June 2011, updated May 2012)
Indiana has the smallest unfunded liability per capita for retiree health care of any state (Bloomberg, Pew Center on the States, U.S. Census)
At 6.75 percent, Indiana's pensions have the most conservative investment return assumptions of any state and is the only state below 7 percent (National Association of State Retirement Administrators)
Indiana's combined pension and long-term debt liability as a percentage of GDP is the 2nd lowest in the country (Moody's, January 2011)
Here is a link to a chart which shows the distributions to pensions: http://www.in.gov/gov/files/ATRgraph.pdf
Audio of today's news conference is posted at the link below: http://www.in.gov/gov/files/Audio/2012/100412PensionFundATRAnnouncement.mp3