The American Legislative Exchange Council (ALEC) came out with a report this week based on reviewing the latest available actuarial valuations of over 280 state-administered pension plans and adjusting the discount rate from an average of 7.37% to a ‘riskless’ rate of of 2.344%.
I disagree with the methodology since I believe the funded status of a particular plan should be considered when adjusting the wishful discount rates that the plan actuaries who politicians hire are ‘encouraged’ to use. That is, a plan closer to full funding should be able to use a rate closer to that 7.37% while a pure pay-go plan (Puerto Rico) should use a rate closer to 0% since that is about what they are getting for the few days any money stays in the trust.
Nevertheless there were some nice charts ranking states by Funded Ratio, Unfunded Liabilities, and Unfunded Liabilities Per Capita. However, I did not see where they had the underlying data so, based on those charts, I decided to extract some other numbers.
Here is the spreadsheet sorted by state and totaled which yields:
- Total Accrued Liabilities: $8.6 trillion
- Total Assets: $3 trillion
- Unfunded Liabilities: $5.6 trillion
- Average Funded Ratio: 35.1%
- Average Unfunded Per Capita: $17,427
- US Population: 321 million