Pension Fund Problems Worsen in 43 States

By Laurie MeislerLaurie Meisler

Published: June 30, 2017 | Updated: August 29, 2017

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

50% or less

60%

70%

80%

90% or more

No data available

50% or less

60%

70%

80%

90% or more

77.3

62.7

—

64.3

58.3

84.0

87.7

71.2

65.9

53.2

64.0

94.5

57.5

55.3

35.6

80.5

86.0

73.1

96.9

81.6

71.0

52.6

30.9

44.1

63.0

31.4

—

72.3

46.0

88.8

76.7

72.1

72.4

64.9

81.1

60.4

65.4

65.1

76.9

—

53.8

88.3

100.5

71.9

60.2

—

67.2

75.8

—

73.0

79.1

77.3

No data available

50% or less

60%

70%

80%

90% or more

62.7

—

64.3

58.3

84.0

87.7

71.2

65.9

53.2

64.0

94.5*

57.5

55.3

35.6

80.5

86.0

73.1

96.9

81.6

71.0

52.6

30.9

44.1

63.0

—

72.3

46.0

88.8

76.7

72.1

72.4

64.9

81.1

31.4

60.4

65.4

65.1

76.9

—

53.8

88.3

100.5

71.9

60.2

—

67.2

75.8

—

73.0

79.1

Notes: *Figures are for 2017 because New York has a March fiscal year; **Figures for these states are based on GASB Statement No. 25 and have not been ranked.

Source: Bloomberg, Comprehensive Annual Financial Reports

Methodology: Bloomberg ranked U.S. states based on their pension funding ratios in 2016 (unless otherwise noted) under the Government Accounting Standards Board Statement No. 67. The funding ratio, which is calculated by dividing each state's aggregated fiduciary net position by its aggregated total pension liability, provides an indication of the financial resources available to meet current and future pension obligations. To assemble these figures, the Bloomberg municipal fundamentals team collected and supplemented data from each state's Comprehensive Annual Financial Report, a set of government financial statements. Where specific data were missing in the consolidated reported totals, the pension funds were contacted directly. Data are for individual states' respective fiscal year-ends as of the date of publication of the CAFR. Fiscal year-end of supplemental pension reports may differ from the state's CAFR. In 2012, GASB released Statement No. 67, which affects financial reporting for pension plans. Implementation of GASB 67 is contingent upon the pension plan type, and figures are not available for five states. They use FASB 25, the previous standard. Calculated medians exclude those five states.

Design & development: David IngoldDavid Ingold, Mira RojanasakulMira Rojanasakul and Cedric SamCedric Sam

With assistance from: Karen Altamirano