by Anthony B. Sanders
Three states in the US are below 40% in terms of funding ratio: New Jersey, Kentucky and Illinois. And the funding ratio has deteriorated in 43 states. And the funding ratio deteriorated in each of the worst 15 states.
(Bloomberg) –The news continues to worsen for America’s public pensions and for the people who depend on them. The median funding ratio—the percentage of assets states have available for future payments to retirees—declined to 71.1 percent in 2016, from 74.5 percent in 2015 and 75.6 percent in 2014. Only six states and the District of Columbia have narrowed their funding gaps; New York did best, going from 90.6 percent to 94.5 percent. D.C. is now overfunded.
By contrast, New Jersey, Kentucky and Illinois continue to lose ground and now have only about one third of the money they need to pay retirement benefits. And three states had double-digit declines in their pension funding ratios in the past year: Colorado, Oregon and Minnesota—though some of this can be attributed to actuarial changes in the way pension liabilities are calculated.
We’ve ranked the states by the size of their funding gap. The lower the funding ratio, the more money the state has to come up with to meet its pension obligations.
Public employee pension funding ratio by state, 2016 figures
The Eagles sang it best: these pensions are “Already Gone!”
Taxpayers will ultimately be called upon to honor the retirement benefits promised by Federal and State governments unless the retirement benefits can somehow be dialed-back.