Fitch claims that MPACT is struggling financially. She told lawmakers that MPACT – with 22,293 families enrolled – is only 76.8 percent funded, leaving a $94 million shortfall. Fitch also told legislative leaders that MPACT investment earnings since inception had performed at 4.8 percent against an assumed performance rate of 7.8 percent.
Reeves, who oversaw and promoted the state’s college savings plans during his tenure as Fitch’s predecessor in the treasurer’s post, asked Fitch a pointed question: “Would you also suggest we stop taking new enrollment in Public Employees Retirement System?”
The question is legitimate. If poor market performance of investments is a legitimate reason to suspend new enrollment in MPACT, then what about the giant state public employee retirement system which literally dwarfs MPACT in size, scope and dollars. PERS impacts 91,000 state retirees and 163,000 state employees.
If Fitch is alarmed at MPACT being 76.8 percent funded for 22,293 families, then why not the same concern for the 154,000 families depending on PERS?