First, a quiz today:
North Carolina, South Dakota, Washington, and Wisconsin
Connecticut, Illinois, Kentucky, and Rhode Island?
In 2010, the first group of states’ pension plans were at least 95% funded. The second group, among the worst in the country, were looking at funding that was below 55%.
A recent Pew report conveys the unsustainable position in which many states find themselves because of long run pension obligations. Using 2010 data because it is the most recent for all 50 states, Pew also describes recent developments in specific states. While 43 states have begun to diminish their retirement obligations by reducing benefits and/or increasing employee contributions, still the major changes that are necessary have only just begun. The report details who is doing what.
The US map below provides a summary but I recommend looking at the Pew Report. It is excellent. Also, you might want to see a NY Times article on the pension crisis in Great Britain and specific information on the situation for Chicago’s teachers’ pensions.
A final fact: Having expected an 8% pension plan gain and instead reporting a median loss of 25% for 2008, states pension obligations started their downward spiral.
Below are state by state pension obligations, 2010, from a Pew US map. The “blue states” are those whose plans are at least 80% funded.