(Indianapolis, Ind.) - Governor Mitch Daniels is using $360 million from the Indiana's budget surplus to make five state pension funds sound.
The governor said Thursday that $207 million will be invested in teacher pensions for those educators retired prior to 1996, along with $90 million toward judges' pensions, $32 million for state police, $17 million for prosecutors, and $13 million for the conservation, gaming, and excise officers’ pension fund.
The money is coming from part of the state’s $2.2 billion in cash reserves. Daniels believes the contributions are great news at a time when other states can't honor pension commitments.
“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,” the governor said.
State Senator Luke Kenley (R-Noblesville) presented individuals representing each of the funds a large, fake check
The new contributions mean that four of the pension funds will now be funded at 80 percent, considered fully funded. The exception is the teacher pension fund, although Daniels said the $207 million will put the fun on solid financial footing.
Much of Indiana’s $14 billion state pension funding gap is due to the Pre-1996 fund. Daniels told reporters that teachers pension is a “pay as you go” system and was never meant to be funded the same way most pension programs are today.
“Putting another $200 million buys down another year or two maybe of getting that thing smoothed out,” said Kenley.
Also as part of the $2.2 billion surplus, the state will return $360 million to state taxpayers with a roughly $100 deduction to individual filers and about $200 for joint filers. More details on the returns will be released later this month, Daniels said.