Worst Funded State Retirement System

New Jersey announced their pension-hole numbers a month ago but how do they stack up against other states?

Bloomberg apparently did some compiling and, as it turns out:

New Jersey became the state with the worst-funded public pension system in the U.S. in 2015, followed closely by Kentucky and Illinois.

The Garden State had $135.7 billion less than it needs to cover all the benefits that have been promised, a $22.6 billion increase over the prior year, according to data compiled by Bloomberg. Illinois’s unfunded pension liabilities rose to $119.1 billion from $111.5 billion.

….

Broad numbers mask big difference in the health of public pensions between states. While New Jersey only has 37.5 cents available to pay each $1 of benefits, South Dakota, the state with the best-funded pension, had $1.04, according to data compiled by Bloomberg. Kentucky, the state with the second-worst funded retirement system, had a ratio of assets to liabilities of 37.8 percent, followed by Illinois at 40.2 percent.

New Jersey and Illinois’ pension liabilities have led to credit-credit rating cuts and higher borrowing costs relative to other governments. The Garden State 10-year bonds yield about 2.5 percent, or 0.8 percentage point more than top-rated debt and the second highest among 20 states surveyed by Bloomberg. Illinois pays the highest, 3.7 percent.

bloom-states

10 responses to this post.

  1. Posted by Anonymous on November 2, 2016 at 8:08 pm

    Thank goodness for CC’s Wall Street buds and their alternative investments (& fees) or NJ’s #s would surely be worse – LOL!

    Reply

  2. Posted by Anonymous on November 2, 2016 at 9:19 pm

    Thank you Chris Christie, your career is over good thing you stole millions while you could

    Reply

  3. Posted by Anonymous on November 2, 2016 at 10:27 pm

    First they came for the factory jobs while wages were high and I did not speak out—
Because I did not have a factory job.
    Then they came for the pensions and I did not speak out— 
Because I did not have a pension
    Then they came for Social Security and I did not speak out— 
Because I was not yet getting Social Security
    Finally they came for me—my 401K, my IRA/SEP, my 529 and there was no one left to speak up for me.

    Reply

    • Posted by Anonymous on November 3, 2016 at 9:28 am

      Except the filthy wealthy and well they don’t…

      Reply

    • Posted by Bpaterson on November 3, 2016 at 11:39 am

      anon I did something similar back in 2009:

      (With apologies to Pastor Martin Niemöller)

      “In New jersey, they came first for my Washington and Lincoln, And I didn’t speak up because I still had my Hamilton and Jackson;

      And then they came for the Hamilton and Jackson, And I didn’t speak up because I still had my Grant and Franklin;

      And then they came for the Grant and Franklin, And I didn’t speak up because I still had my work and my life;

      But then… they came for me… And by that time there were no presidents left to stop my government.”
      Posted 22nd May 2009 by TREEeditor

      Reply

    • Posted by Anonymous on November 3, 2016 at 7:07 pm

      Oh but that’ll never happen…..

      Reply

  4. Posted by dentss dunnigan on November 3, 2016 at 8:20 am

    Jim Florio should get some blame too. His 1992 Pension Reevaluation Act changed the actuarial assessment of the funds’ assets and assumed a higher rate of return. Due to the Pension Reevaluation Act NJ and it’s employees was legally required to make much lower payments than previously. Now with almost zero interest rates that actuarial assessment Must be lowered to something below 5% and higher state and employees contributions must follow ,or change the drawdowns .

    Reply

  5. Posted by Tough Luck on November 3, 2016 at 10:58 am

    Welcome to the reality of what happens when state politicians consistently set budget priorities based upon political expediency vs. sound business practices. When you skip or cut short required annual payments on most anything the debt piles up. This is not rocket science.

    Reply

  6. The NYC pension system is larger than all but the largest few state pension systems. And it’s funding level is as bad as the states cited.

    Even though, in contrast with the states cited, NYC taxpayers have paid more than enough over the past 30 years to fund the pensions public employees were initially promised. And more, as a percent of wages, than the taxpayers of any other state.

    Reply

    • Posted by Anonymous on November 3, 2016 at 8:54 pm

      Ok let’s turn the age old free market tables! Why does one CHOOSE to continue living in such a tax hell hole? Either you’re extremely wealthy or you’re…..well let’s leave that conclusion to the reader

      Reply

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