Most state pension plans show funding shortfalls
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Most state pension plans are significantly underfunded, according to a Pew Charitable Trusts analysis released Tuesday.
On average, state pension plans were 71.8% funded in 2013, the most recent year information for all the states is available, down from 72.3% the prior year, according to the Washington-based policy research organization.
“The gap between the pension benefits that state governments have promised workers and the funding to pay for them remains significant,” Pew said in its analysis. “Many states have enacted reforms in recent years and have benefited from strong investment returns. But investment returns are uncertain, and government sponsors in many states have continued to fall short of making recommended contributions in 2013.”
Only two states — South Dakota and Wisconsin — had fully funded pension plans in 2013. Oregon and North Carolina were next, with each state having a funded ratio of 96%.
States with the lowest ratio of pension plan assets to liabilities in 2013 include:
• Illinois, 39%
• Kentucky, 44%
• Connecticut, 48%
• Alaska, 52%
In all, state pension plans in 2013 had $3.434 trillion in liabilities and $2.466 trillion in assets for a funding shortfall of $968 billion.
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