States face massive pension fund gap | Capitol Hill Blue
A total of 31 states had pensions that were underfunded in fiscal 2009, the latest year for which data is available, up from 22 states a year earlier, the Pew Center on the States reported. Illinois consistently has had the lowest pension funding level among states, one that worsened to 51 percent in fiscal 2009 from 54 percent in fiscal 2008, according to the Pew report. In fiscal 2009, which for most states began in July 2008, states were short $660 billion for future pension payments and $604 billion for other retiree benefits, namely healthcare. The financial crisis in 2008 crushed many pension funds’ investments, just as historic budget woes forced governments to cut contributions to those funds. 26 trillion in paying for public employee pensions and other retirement benefits, a gap that grew 26 percent in one year and will take many more years to wipe out, according to a report released on Tuesday. Preliminary data for fiscal 2010 shows that pension funding levels of 10 states deteriorated further, while just three registered increases, Pew found. A year ago, Governor Pat Quinn signed into law a pension reform measure reducing benefits for new state workers, which he said would save more than $200 billion over nearly 35 years. On Monday, Kim’s group released a survey of 216 public pension funds showing the average return over the last year was 13. “Overall, these results suggest that while states benefited from better returns in fiscal year 2010, the legacy of the financial crisis … will remain an issue for years to come,” Pew said in the report. Growing unfunded pension liabilities on top of still daunting state budget gaps are a top concern of Wall Street rating agencies and investors in the $2. States typically assume an 8 percent annual return and their pension plans suffered a median 19. Securities and Exchange Commission is looking into “communications” by the state regarding potential savings or reduced contributions to pensions resulting from the law. Last year, Pew found states were short $1 trillion in fiscal 2008 on promises to retirees, using data that came from before the financial crisis. Pensions are deemed “underfunded” when they are unable to pay at least 80 percent of liabilities. 16 billion of taxable bonds to raise money for its annual pension payments. 1 percent drop in their assets’ market value in fiscal 2009, Pew said. Most states are legally bound to pay retirees benefits, and they must make up for any investment loss from their already depleted treasuries or by borrowing. In fiscal 2010 and 2011, the state sold $7. states are short $1. The world has changed in the last 18 months,” said Hank Kim, executive director of the National Conference of Public Employee Retirement Systems....
31 US states now have unsustainable public sector pension deficits, total $1.26trn. UK next unless action taken....
State Pension Plans Lose Ground: The funding gaps at some state pension plans in the US widened in fiscal 2010, ...