INDIANAPOLIS (AP) — Indiana pension funds took a temporary hit last year and may not rebound as much as public workers would like, based on long-term economic trends outlined for lawmakers Tuesday.
The state's public pensions collected 1 percent interest on average last year, rather than the 7 percent the Indiana Public Retirement System originally expected. That immediate hit, plus a long-term decline in expectations, led pension leaders to tell members of the General Assembly's Pension Management Oversight Committee that pension plans may have to kick in more money next year.
Steve Russo, executive director of the Indiana Public Retirement System, said state investments underperformed last year as a result of continued economic troubles in Europe, partisan gridlock in Washington that nearly shut down the federal government and low interest rates set by the federal reserve. The poor performance caused Indiana's unfunded pension liability to increase from $3.5 billion to $4.9 billion.
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