Alabama retirement system now paying pensions to more than 100,000 people

MONTGOMERY - The Retirement Systems of Alabama in June provided pension benefits to more than 100,000 retirees or their survivors, the first time it has crossed that threshold.

Most of the retirees worked for public schools and colleges or state agencies, although roughly 15,900 worked for counties and other local governments or boards whose employees also are covered by RSA.

RSA in September 1987 paid pensions to 37,641 retirees or survivors. In June, RSA paid benefits to 100,371 people.

"It's just one of those magical numbers - you know, the first million dollars you make or the first 100,000 recipients of something - that just shows the magnitude of the growth, and that growth will continue," David Bronner, RSA's chief executive, said Wednesday.

The number of RSA's retirees grew 167 percent in less than 21 years. Benefit payments to those retirees have risen even faster because of rising salaries - pensions are based in part on a person's salary - and cost-of-living increases approved by legislators for retirees.

RSA payments to retirees and survivors totaled $258.5 million in fiscal 1987. Payments totaled $2.035 billion in fiscal 2007, which ended Sept. 30, for an increase of 687 percent in 20 years.

A cause for concern:

Paying pension benefits to more than 100,000 people does not, by itself, mean the state pension system is in financial trouble, Bronner said.

But he said RSA could get in financial trouble in the "highly unlikely" event that lawmakers in coming years recklessly raise pension benefits for retirees without giving RSA the money to pay for them.

"You financially demolish the system if you have a bunch of (benefits) without giving the system additional money to fund those benefits," Bronner said.

RSA collects money from employees and governments and invests it in stocks, bonds and other assets to help pay benefits to retirees. Those assets have grown along with pension payouts, but not as fast....