PEW State Funded Ratios

The Pew Charitable Trusts updated their State Pension Funding Gap brief for 2014 and after combing their numbers a spreadsheet with ours here is how they compare:

PBFR

The underlying plans in the PEW and BURY studies are different but the conclusions match closely as to the level of underfunding and funded ratios.

But what struck me was that when you download the PEW data you notice there are 5 states with liability values in the $190 billion range yet the reported asset values for those states vary wildly.  One is almost fully funded while two are at 80% and the bottom two at 40%. Theoretically similar obligations were accrued yet bad earnings, complaisant actuaries, feckless politicians or some combination conspired to underfund four of those plans, two severely.

More on this in Monday morning’s blog where you will see the numbers and hear my case for why one of these states is clearly the most hopeless in the country.

11 responses to this post.

  1. Posted by Anonymous on August 26, 2016 at 3:49 pm

    50/50 shot NJ or IL? I know there many variables (not necessarily an apples to apples comparison) but how do the salary/benefits of NJ & IL compare to the other three States not to mention a 20 year summary of employee & employer contributions?

    Reply

  2. Posted by MJ on August 26, 2016 at 5:14 pm

    John, does this mean funded as far as current retirees already receiving benefits but not counting those coming up who were promised benefits?

    Reply

  3. Posted by Anonymous on August 26, 2016 at 10:10 pm

    Ok so the question remains. Some have stated NJ is the most over taxed State and yet our Pensions are in the bottom tier of ℅ funded. How did we get here, aside from our benefits are too generous…. A comparison to the other three States John refers to above might show us why. Employees’ salary and/or contribution rate as well as employer contributions. Also would have to include health benefit cost difference because presumably NJ spends more and that’s less money available for employer contribution.

    Reply

    • Posted by dentss dunnigan on August 27, 2016 at 3:46 pm

      Sadly, in a world of low returns, there is no simple explanation; read “unsolvable math problem” in a world of ZIRP and NIRP, ….http://www.zerohedge.com/news/2016-08-09/public-pension-ponzi-are-public-pensions-short-8-trillion

      Reply

    • Posted by George on August 28, 2016 at 3:38 pm

      If you want a small example in NJ it is law that police be used as flaggers on construction near roadways. Even Taxachusetts did away with that. This is bad for police too as it gives the impression much of their policing is padded non police work.

      The NJ DMV does cursory vehicle inspections, why? The DMV cannot issue federally compliant licenses but they are doing vehicle inspections.

      In NJ it is illegal to pump your own gas. There used to be rationals like employement (exept on highway service areas and Costco I only see non english speaking workers) and people who pump their gas spill it attempting to top up the tank (I find many of the new immigants dont know how to work the pumps).

      That is not to say the state should not do anything. In NY the state insurance dept sells workerscomp making it easy to comply with rules for houshold workers. That works.

      Reply

      • Posted by Anonymous on August 28, 2016 at 5:22 pm

        Yet another example of the compounding impact on what’s wrong with NJ. It’s clear P&B is a side effect of a deeper contangious symptomatic political disease.

        Reply

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