Change Benefits for Current Employees
Can we Just Change Employee Benefits?
Just changing current employee retirement benefits will increase the funded status for 18 years, however, after 18 years the funded status will continue to decrease. The benefit cuts being proposed are only for current employees in Tier 1, not Tier 2.
This graph shows that current employees only make up 50% of the total pension fund liability. The remaining liability is for the 27,481 annuitants and inactive members. An inactive member is a former employee that has earned a pension, but is not yet eligible to collect.
Just changing benefits for current employees decreases the pension fund liability for Tier 1 employees, but, as shown below, liabilities will continue to increase over time. Only cutting employee benefits results in a 41% funded status by 2040.