2010 State Pension Funding Review

By Analytical Services Division on October 26th, 2010

We are pleased to bring you our 8th Annual Pension Fund Report.  You will notice that it has been expanded with more charts and graphs, more data, and some additional general discussion. We thank Loop Capital’s Pension Analyst, Ann Kibler, for taking the publication to the next level.

Our primary goal is to assemble the data, as it is, for our clients to review and draw their own conclusions.  All the data is directly from the Comprehensive Annual Financial Report of each individual state.  We do not adjust, massage, convert, or modify any data, but instead leave that exercise to the reader.  We have been fortunate to receive a number of recommendations, most of which we have used.  We invite your comments and questions.

While the news appears somewhat bleak from today’s vantage point, we believe the public pension problem can be solved if meaningful progress is taken today.

2010 State Pension Funding Review (PDF) »

While analysts disagree about the scope of the state pension problem and the optimal approach, essentially the problem is no more complex than the individual's need to save and invest for their retirement.  Like an individual, it is very important that states contribute materially to their pension plans every year.  If they do, additional steps to control pension costs will enable the financial burden facing states to be brought under control.  If not, the financial burden will lead to substantial litigation and state budgetary stress beyond anything recently experienced. 

Pension Report Highlights:

  • A detailed listing of 244 of the largest state pension plans, up from 241 last year, including their value of assets, amount of unfunded actuarial accrued liabilities, actuarial assumptions, and funded status from 2002-2009
  • An expansion of our prior focus on state employee and teacher retirement plans to capture legislative, military and judicial plans
  • An exploration of GASB's role in increasing plan transparency, consistency and comparability
  • An in-depth discussion regarding trends in changes of actuarial assumptions and general funding statistics
  • New sections on states' annal required contributions and post employment benefits