State Pensions

Augmenting the research of www.publicfundsurvey.org and focusing on hard numbers regarding assets valued at market, payouts, and contributions this summary of 110 state retirement systems with valuations readily available provides a better picture of the future of the public retirement system without the distortions of inflated ‘actuarial’ asset values and interstate variations in actuarial assumptions.

Public employees have more in common with each other (lifetime health benefits for a start) than artificial distinctions like which state they come from or which actuary they use to value their liabilities would lead you to  believe.  My methodology approximates the overall liability of my own state, New Jersey, which is trending toward an ‘official’ accrued liability of $150 billion as of June 30, 2010 (it was ‘officially’ $135 billion as of 6/30/09).  To get my funded percentage (Bury Ratio) I divide the total market value of assets by the sum of (a) benefits being paid by a factor of 10 and (b) active employees over retirees times the same benefits being paid by a factor of 5.  With longer life expectancies for those with lifetime medical insurance and politicians unwilling to significantly challenge the status quo, it could be argued that 12 and 6 respectively would be more realistic factors which would lower the Bury Ratio for all plans to 55.04% from 66.05% but we’ll get into that later.  For now, here is the spreadsheet:

Comparison of 110 state sponsored defined benefit plans
Click below to open up a separate file:
statepensions.xls
Microsoft Excel sheet [51.0 KB]

The Payout Ratio is the value of benefits being paid over the market value of assets and provides an indication as to how long each plan may have left

assuming no significant departure from current funding streams.

Look for a series of blogs over the next few weeks analyzing these numbers, with a special emphasis on New Jersey, in conjunction with the rollout of this website.  Below is a listing of links to the underlying valuation reports.

Alabama

Employees

Teachers

Judicial

Alaska

Public Employees

Teachers

Arkansas

Public Employees

Teachers

Judicial

State Police

Arizona

State

Public Safety Personnel

California

Public Employees

Teachers

Colorado

Public Employees Retirement Association


Connecticut

Teachers Retirement Board

Delaware

Public Employees

District of Columbia

Retirement Board

Florida

Retirement System

Georgia

Employees

Teachers

Hawaii

Employees

Idaho

Public Employees

Illinois

Municipal Retirement Fund

State Employees

Teachers

State Universities

Judges

General Assembly

Indiana

Public Employees

State Teachers

Iowa

Public Employees

Kansas

Public Employees

Kentucky

Retirement Systems

Teachers

Louisiana

State Employees

Teachers

School Employees

Municipal Police Employees

Municipal Employees

Maine

Public Employees

Maryland

State Retirement and Pension System

Massachusetts

State and Teachers

Michigan

Municipal Employees

Public School Employees

State Employees

Minnesota

State Employees

Judges

Legislators

State Patrol

Correctional Employees

Eelctive State Officers

Mississippi

Public Employees

Missouri

State Employees

Public Schools

Local Government Employees

DOT & Patrol

Montana

Public Employees

Teachers

Nebraska

School

State Patrol

Nevada

Public Employees

New Hampshire

Retirement Systems

New Jersey

Comprehensive

New Mexico

Educational

Judicial

Magistrate

Public Employees

Volunteer Firefighters

New York

State and Local

State Teachers

North Carolina

Teachers and State Employees

Local Governmental Employees

Firemens and Rescue Squad Workers

Consolidated Judicial

National Guard

North Dakota

Public Employees

Teachers

Ohio

Public Employees

School Employees

State Teachers

Police & Fire

Oklahoma

Public Employees

Teachers

Oregon

Public Employees

Pennsylvania

State Employees

Public School Employees

Rhode Island

Employees Retirement System (ERSRI)

State Police

Judicial

Municipal Employees

South Carolina

Retirement System (SCRS)

Police Officers (PORS)

General Assembly (GARS)

Judges and Solicitors

National Guard

South Dakota

Retirement System


Tennessee

Consolidated Retirement System

Texas

Municipal

Employees

Judicial – 1

Judicial – 2

Law Enforcement and Custodial Officer

Teachers

Utah

Retirement Systems

Vermont

State Employees

Teachers

Virgina

Retirement Systems


Washington

Retirement Systems


West Virgina

Public Employees

Wisconsin

Retirement System

Wyoming

Retirement System

17 responses to this post.

  1. Hi John,

    Do you have a copy of the state data spreadsheet that contains actuarial liability numbers? I plan to load those data into R and see if I could create charts to highlights some of the points you made. This is both a learning exercise for myself as well as sharing information with the public. Thanks.

    Reply

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  8. Posted by Anonymous on February 15, 2014 at 8:36 am

    John, the one thing I wish you would clarify about health insurance for state employees is they reach 65, Medicare becomes their primary insurance and the state health insurance becomes secondary. It is a fact so it would be nice to convey it. However it does not help the states current financial state when it comes to paying for any insurance. Okay let me know what you think.

    Reply

    • I think most laymen realize that but what inflates the cost in New Jersey (which has the highest OPEB costs in dollar terms of any state by some measures) is the so many retirees (especially Police & fire) retire way before 65. Also, there’s all that stuff that Medicare does not cover that taxpayers also pick up in some cases, possibly even the cost of Medicare premiums.

      Reply

      • Posted by Anonymous on February 15, 2014 at 8:01 pm

        Thanks for your quick response. Is Obama care separate from MEDICARE or will it eventually replace it? I also believe that the state does not offer free health insurance anymore to any retires who have not already accrued 25 years. From this point on there will be no free health insurance for those who work 25 years or more. Isnt that correct? I think the free health insurance is more of an issue then the pension especially in my case. I only recieve 16k per year in pension.Unfortunately I may need the COLA some day .in order to get by. I am also disabled but do not collect disability

        Reply

        • I think the state put in some cost-sharing but if the COLAs come back I see the state immediately going after retiree health care since that is one thing that everyone seems to agree can be cut. Having New Jersey pay more for both pensions and retiree health care is not an option.

          Reply

          • Posted by Anonymous on February 15, 2014 at 9:26 pm

            When you say going after retiree health, what exactly does it mean and if it were so easy to do, why havent they done it before? Also the COLA is nothing compared to Health care costs per month. If were to receive COLA it would be 30 dollars more per month. Health Insurance must cost at least 800 per month,so how can the two even be compared.

  9. What everyone agrees on is that retiree health benefits are not protected and if COLAs come back requiring higher pension contributions then some governor or legislature will force higher copayments for it to make up for the additional COLAs which could be a significant part of a benefit eventually depending on how they’re defined. These are bottom-line people who want a predetermined outcome and fairness won’t enter into the equation.

    These are

    Reply

  10. Posted by Anonymous on February 15, 2014 at 10:00 pm

    Then why didnt they make changes to the Health Benefits since they are not protected wouldnt that have made more sense and saved more money? I dont understand why they went after something that was protected:? Can you answer that for me please?

    Reply

    • They did go after health benefits in making some public employees chip in more but as far as the heath benefits themselves there are too many George Norcross-types running this state who make money off of health benefits to have them seriously challenged.

      As for going after COLAs it’s because (a) other states are doing it; and (b) there is an immediate reduction in liabilities (20%) which translates into a similar reduction in contributions (if all of those other phony assumptions stay the same) which is the endgame.

      Reply

  11. Posted by Anonymous on February 16, 2014 at 2:52 pm

    I DONT BELIEVE ANY OTHER STATE GOT RID OF COLA COMPLETELY THEY ALL REDUCED THEM. JERSEY WENT FOR THE JUGLAR

    Reply

  12. Posted by Richard on February 23, 2014 at 12:11 pm

    True police and fire retire early but it is a young or at least middle-aged person’s job. Not sure I want someone my age going mano a mano with a mugger or dragging people out of burning buildings. A limited number get promoted to admin positions or the like but the bulk are front-line people.

    Reply

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