News said you had a second year of excellent investment returns. Are you out of the woods with the funding problem?

Despite the good news on ending the fiscal year with a 23.1 percent investment return, we can’t count on investments to close the long-term funding gap. We estimate it would take four more years of 20 percent investment returns to wipe out the $56 billion unfunded liability. That’s an unreasonable expectation given the current state of the global economy and financial markets.

It’d be natural to think that a 23.1 percent investment return would almost cover the 25 percent loss two years ago. However, the math works against us. This year’s 23.1 percent return is on a smaller investment portfolio amount than two years ago. To get us back to the starting point of two years ago, before the 25 percent loss, we’d have needed a 33 percent return this year.