State government pension liabilities

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State Information
See also: Public pensions

State government pension liabilities are the unfunded liabilities that state governments take on when they provide pension and other post-employment benefits to state government employees without simultaneously accumulating the funds to pay for those eventual liabilities.

Defined-benefit pension plans were established originally to set aside funds to pay retirement benefits to employees. These benefits are financed through the contributions of employers and employees, and the investment income derived from those contributions.

Pension plans for state government employees operated initially on a pay-as-you-go basis. Over time, most states attempted to pre-pay the cost of pension benefits for employees. Every state government currently reports on its pension plans in financial statements following guidelines established by the Government Accounting Standards Board.

Pre-funding and ratios

The "funding ratio" is the actuarial value of assets divided by actuarial accrued liabilities. Unfunded liabilities are the portion of accrued liabilities not offset by assets in the plan.

The funding ratio in the 1970s was 50%. In the 1990's, the ratio was 80%. In 2000, the ratio was slightly above 100%, meaning that there were at that time no unfunded pension liabilities.

Impact of 2001 recession

When the recession of 2001 took effect, the fall in the stock market brought significant losses in assets held by the state's pension funds. By 2006, the funding ratio of state pension plans had fallen to 81%. In dollar terms, this meant an accumulated nation-wide shortfall in state pension plans of $360 billion dollars.

State liabilities

Below is a chart detailing the pension liabilities for each state according to PEW and AEI.[1][2]

In Thousands
State PEW AEI Kellog (2009)
AL $9,228,918 $43,544,880 $40,400,000
AK $3,522,661 $14,192,229 $9,300,000
AZ $7,871,120 $45,004,090 $48,700,000
AR $2,752,546 $20,026,314 $15,800,000
CA $59,492,498 $398,490,573 $370,100,000
CO $16,813,048 $71,387,842 $57,400,000
CT $15,858,500 $48,515,241 $4,900,000
DE $129,359 $5,688,663 $5,100,000
FL ($1,798,789) $98,505,110 $8,980,000
GA $6,384,903 $58,742,784 $57,000,000
HI $5,168,108 $18,533,398 $16,100,000
ID $772,200 $10,022,613 $7,900,000
IL $54,383,939 $192,458,660 $167,300,000
IN $9,825,830 $33,756,655 $30,200,000
IA $2,694,794 $21,266,226 $17,000,000
KS $8,279,168 $21,827,991 $20,100,000
KY $12,328,429 $47,016,382 $42,300,000
LA $11,658,734 $43,797,899 $36,400,000
ME $2,782,173 $13,227,289 $11,800,000
MD $10,926,099 $48,199,258 $43,500,000
MA $21,759,452 $60,476,274 $54,200,000
MI $11,514,600 $72,187,197 $63,600,000
MN $10,771,507 $59,354,330 $55,100,000
MS $7,971,277 $32,225,716 $28,700,000
MO $9,025,293 $56,760,147 $42,100,000
MT $1,549,503 $8,633,301 $7,100,000
NE $754,748 $7,438,589 $6,100,000
NV $7,281,752 $33,529,346 $17,500,000
NH $2,522,175 $10,233,796 $8,200,000
NJ $34,434,055 $144,869,687 $124,000,000
NM $4,519,887 $27,875,180 $23,900,000
NY ($10,428,000) $182,350,104 $132,900,000
NC $504,760 $48,898,412 $37,800,000
ND $546,500 $4,099,053 $3,600,000
OH $19,502,065 $187,793,480 $166,700,000
OK $13,172,407 $33,647,372 $30,100,000
OR $10,739,000 $42,203,565 $37,800,000
PA $13,724,480 $114,144,897 $100,200,000
RI $4,353,892 $15,005,840 $13,900,000
SC $12,052,684 $36,268,910 $43,200,000
SD $182,870 $5,982,103 $4,700,000
TN $1,602,802 $30,546,099 $23,200,000
TX $13,781,228 $180,720,642 $142,300,000
UT $3,611,399 $18,626,024 $16,500,000
VT $461,551 $3,602,752 $3,300,000
VA $10,723,000 $53,783,973 $48,300,000
WA ($179,100) $51,807,902 $42,900,000
WV $4,968,709 $14,378,914 $11,100,000
WI $252,600 $62,691,675 $56,200,000
WY $1,444,353 $6,628,204 $5,400,000
Total $1,000,000,000 $2,860,967,583 $2,485,800,000


See also

External links

References