Public Employee Pensions Underfunded by $4.1 Trillion

Illinois, Ohio, New Jersey among worst

GLEN ALLEN, Va., Sept. 3, 2013 /PRNewswire-USNewswire/ -- State Budget Solutions, a national nonprofit dedicated to fiscal responsibility, released a report that finds state public employee pension plans are underfunded by a breathtaking $4.1 trillion.

The report, Promises Made, Promises Broken—The Betrayal of Pensioners and Taxpayers, also identifies states where taxpayers and public employee pensioners are most threatened from unfunded pension promises including: Illinois, Ohio, New Jersey, Oregon, Connecticut, Nevada, New Mexico, Hawaii and Alaska. These states face a particularly large unfunded liability at a per capita level and as a percentage of their annual gross state product.

"This tragically amounts to $4.1 trillion in broken promises. Promises to taxpayers that public officials were managing funds appropriately and to pensioners who, quite frankly, did nothing wrong," said Bob Williams, President of State Budget Solutions. "Too many Americans worked their entire lives to now learn their states and local governments cannot provide what they promised. By not reining in this underfunded pension crisis sooner, elected officials betrayed the trust of citizens by putting politics before public employees, pensioners and taxpayers."

The report is a fair-market evaluation that discounts liabilities at a risk-free rate, as opposed to the optimistic investment returns used by most plans. The worst offenders are the driving force behind state plans that combined to be just 39 percent funded.

"The promise of a reliable pension has been broken to many who are elderly and widowed, many now not eligible for Social Security.  Police, Firefighters and their spouses paid into retirement planning believing that these governments would keep their promises – they have not," added Williams.

States with the lowest funded ratio include:

• Illinois - 24%
• Connecticut - 25%
• Kentucky - 27%
• Kansas - 29%
• Mississippi, New Hampshire and Alaska - 30%

In addition to low funded ratios, states like Alaska, Ohio and Illinois also have some of the largest unfunded liabilities per person weighing in at:

• Alaska - $32,425
• Ohio - $24,893
• Illinois - $22,294

CLICK HERE to read the entire State Budget Solutions report. To schedule an interview with Bob Williams please contact Brian Jodice at (202) 681-3423 or [email protected].

To read Bob Williams full bio CLICK HERE.

About State Budget Solutions
State Budget Solution is non-partisan, positive, pro-reform, proactive and anchored in fundamental-systemic solutions.  The goal is to successfully engage political journalists/bloggers, state officials and opinion leaders in a new way of thinking about state government and budgets, fundamental reforms, transparency and accountability.  Sharing studies and articles, data sets, anecdotes, and compelling narrative about what is happening in state and local budgets, State Budget Solutions presents and disseminates information about every aspect of coming fiscal and economic disasters and, more importantly, highlights fundamental reforms to avoid them.

Check out StateBudgetSolutions.org for more information.

SOURCE State Budget Solutions

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