Generous benefits or serious losses

From Mario Iacone, January 23, 2011

Some interesting statistics on STRS FUNDING RATIO and UNFUNDED ACTUARIAL ACCRUED LIABILITY and the impact of INVESTMENT LOSSES on those items.

Data obtained from 2010 STRS Financial Report under Statistical Information.

FUNDED RATIO:
2007 ---- 82.2%
2008 ---- 79.1%
After Investment Losses
2009 ---- 60%
2010 ---- 59.1%

UNFUNDED ACTUARIAL ACCRUED LIABILITY:
2007 --- 14.45 B
2008 --- 18.23 B
After Investment Losses
2009 --- 36.53 B
2010 --- 38.77 B

Do we have a serious problem because of 3% COLA and generous benefits or because of Investment Losses?

Will any fix last without stabilizing the Investment Policy?