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Michigan Pension Changes May Be Model for Struggling States

Michigan’s “radical reform” 14 years ago to rescue its retirement system by placing newly hired workers in a 401(k) program may show struggling states the way back from the worst pension crisis ever.

Thirty-three states have assets less than 80 percent of what is needed to pay promised benefits, a common threshold for sustainability, according to an annual study of pensions by Bloomberg Rankings. Median funding fell to 73.7 percent from 76.2 percent in 2009, the data show, even as the U.S. economy rebounded from the deepest contraction since the Depression.