The state should ensure that excessive resources are not committed to funding teachers' pension systems.
As of June 30, 2015, the most recent date for which an actuarial valuation is available, Tennessee's teacher pension system is 96.4 percent funded, an increase of 0.4 percentage point since NCTQ's last report. Its current pension debt is $793 per pupil throughout the state. It also has an 8-year amortization period. This means that if the plan earns its assumed rate of return and makes its full actuarially determined contribution payments, it would take the state 8 years to pay off its unfunded liabilities. Both levels are better than regulatory recommendations, and Tennessee's system is financially sustainable, according to actuarial benchmarks.
Tennessee does not commit excessive resources toward its teachers' retirement system. The mandatory employee contribution rate to the defined benefit portion of the hybrid plan is 5 percent, and the mandatory employer contribution rate is 9.04 percent. Both of these rates are reasonable, considering that teachers and local districts also contribute to Social Security.
Tennessee Consolidated Retirement System, Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2015
Tennessee indicated the system was 127.5% funded, but did not provide documentation or citation.