IT’S NOT JUST multi-employer pension plans that have suffered from the “Great Recession” plaguing the U.S. economy. A report released Feb. 18 by the PEW Research Center for the People & the Press says state pension plans for public employees have been hammered as well. As of fiscal year 2008, the states held $3.35 trillion worth of obligations for pension, health care, and other retirement benefits promised to current and retired workers. However, they actually have $2.35 trillion on hand — a $1 trillion gap. Pension plans should be funded at an 80 percent or greater level, according to most experts. Some states, such as Illinois (54 percent funding), fall well below that level. The PEW report lists 19 states as “facing serious concerns,” 15 “needing improvement,” and 16 as “solid performers.”
Seventeen states have taken steps to fix their under-funding problems by reducing benefits, raising contributions, or both.
