Public pension health by state

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Pension policy
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Public pension health by state
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State public pension systems

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Pension health is a term used to describe the status of the country's pension systems. Several groups, including the Pew Charitable Trusts, Morningstar independent research group and State Budget Solutions, have generated reports on different aspects of the states' pensions. The Pew and Morningstar reports documented relatively similar findings, while the State Budget Solutions report showed significantly less optimistic results. That said, every state was reported to have at least slightly underfunded pension systems, with the exception of the Pew report's data on Wisconsin.

Findings

According to the Pew Center, in order for a state to have what is considered to be fiscally sustainable, it must have a funded ratio of at least 80 percent. According to the Pew Center's report, the following 14 states were considered to have sustainable pension systems in fiscal year 2012:[1]

  1. Wisconsin
  2. Washington
  3. North Carolina
  4. South Dakota
  5. Tennessee
  6. Oregon
  7. Delaware
  8. New York
  9. Idaho
  10. Florida
  11. Texas
  12. Georgia
  13. Wyoming
  14. Iowa
Funded ratios for the 50 states.

According to the Morningstar report, the following 11 states were considered to have sustainable pension programs in fiscal year 2012:[2]

  1. Wisconsin
  2. Washington
  3. North Carolina
  4. South Dakota
  5. New York
  6. Delaware
  7. Florida
  8. Idaho
  9. Oregon
  10. Texas
  11. Georgia

The only state that was considered fiscally sustainable according to the State Budget Solutions report for fiscal year 2013 was Wisconsin.[3]

Comparison

Pension health is judged based on several factors, but one of the most straightforward numbers used in estimating pension health is the funded ratio. The chart below compares the funded ratio for each state in the country as reported in the three different reports. Additionally, it also calculates the average funded ratio for each state.

Funded ratio, 2012-2013
State Pew Center
report (2012)
Morningstar
report (2012)
State Budget
Solutions (2013)
Average
Alabama 66% 66.20% 31% 54.40%
Alaska 55% 59.20% 25% 46.40%
Arizona 72% 74.30% 35% 60.43%
Arkansas 71% 71.40% 35% 59.13%
California 77% 76.00% 39% 64.00%
Colorado 63% 59.20% 32% 51.40%
Connecticut 49% 49.10% 23% 40.37%
Delaware 88% 88.30% 45% 73.77%
Florida 82% 86.40% 42% 70.13%
Georgia 81% 81.90% 41% 67.97%
Hawaii 59% 59.20% 29% 49.07%
Idaho 85% 84.40% 43% 70.80%
Illinois 40% 40.40% 22% 34.13%
Indiana 61% 58.40% 36% 51.80%
Iowa 80% 79.50% 41% 66.83%
Kansas 56% 56.40% 28% 46.80%
Kentucky 47% 46.80% 24% 39.27%
Louisiana 56% 55.50% 30% 47.17%
Maine 79% 77.20% 42% 66.07%
Maryland 64% 64.40% 32% 53.47%
Massachusetts 61% 66.40% 29% 52.13%
Michigan 61% 66.40% 30% 52.47%
Minnesota 75% 75.00% 35% 61.67%
Mississippi 58% 58.00% 27% 47.67%
Missouri 78% 76.90% 37% 63.97%
Montana 64% 63.90% 36% 54.63%
Nebraska 79% 78.50% 38% 65.17%
Nevada 71% 71.00% 33% 58.33%
New Hampshire 56% 56.20% 28% 46.73%
New Jersey 65% 65.40% 30% 53.47%
New Mexico 63% 63.00% 33% 53.00%
New York 87% 90.50% 44% 73.83%
North Carolina 95% 93.90% 50% 79.63%
North Dakota 63% 66.30% 29% 52.77%
Ohio 67% 77.20% 34% 59.40%
Oklahoma 65% 65.30% 32% 54.10%
Oregon 91% 82.00% 40% 71.00%
Pennsylvania 64% 63.90% 32% 53.30%
Rhode Island 58% 58.20% 31% 49.07%
South Carolina 65% 65.40% 32% 54.13%
South Dakota 93% 92.60% 52% 79.20%
Tennessee 92% N/A 46% 69.00%
Texas 82% 82.00% 39% 67.67%
Utah 76% 76.50% 41% 64.50%
Vermont 70% 68.41% 33% 57.14%
Virginia 65% 69.50% 35% 56.50%
Washington 95% 98.10% 43% 78.70%
West Virginia 63% 64.00% 32% 53.00%
Wisconsin 100% 99.90% 67% 88.97%
Wyoming 80% 79.60% 38% 65.87%
United States 72% 72.40% 36% 60.13%
Sources: The Pew Charitable Trusts, "The Fiscal Health of State Pension Plans: Funding Gap Continues to Grow," accessed April 27, 2015
Morningstar, "The State of State Pension Plans 2013: A Deep Dive Into Shortfalls and Surpluses," accessed April 27, 2015
State Budget Solutions 2014 Unfunded Pension Liabilities Report, accessed April 3, 2015

See also

References