Why this is not headline news is a mystery. Regardless, MPSERS (Michigan Public School Employees' Retirement System) details a $9.2 BILLION loss in asset value on page 19 of the report (image below), it is in the second line of the third paragraph.
MPSERS - Michigan Teachers' Pension Fund Lost $9.2 Billion in 2008
The contribution rate schools will be forced to pay will be expanding SIGNIFICANTLY to pay for this loss, and to pay for the actuarial deficit the program has accumulated. That deficit, using the old asset value, exceeds $30 BILLION. Add the current loss to the amount and we approach a $40 billion deficit. Even amortized over 20 years that adds nearly $2 Billion in year in extra payments - or and added cost (and additional funding requirement) of $1,234/student. Together with the current per student pension contribution of $981 and you have a cost of $2,215 per student or 30% of the $7,316/student foundation allowance. That's simply not sustainable.
The deceptive "funded ratio" is seen on page 18 of the document:
MPSERS - Teacher's Pension Audit Hiding the Real Facts
The page which details the use of old asset values. The report simply ignores the current loss of $9.2 billion. How is this different that what Bernard Madoff did to his clients?
MPSERS - Michigan Teachers Pension Fund Deceptive on its Financial Performance