Public Pension Pain - Ten Worst States in Terms of Funding
According to "Pension burden grows for states" (Seattle Times, March 15, 2008), available pension assets are quickly shrinking, especially as equity returns continue to plummet. The article states that global stock market value dropped by more than $5 trillion in January 2008, prompting Standard & Poor's analysts to warn of danger ahead in the form of poor funding ratios.
The accompanying visual says it all, with the biggest pension deficits reported for Illinois ($32.4 billion) and Connecticut ($14.8 billion).
Don't forget OPEB (Other Post-Employment Benefits). GASB 45 (Government Accounting Standards Board) is creating real pain for a significant number of public entities. Check out this exchange of unhappy taxpayers in West Hartford, Connecticut regarding the extent of unfunded healthcare promises to municipal workers.
Click to read a "GASB Q&A." If you missed the October 2007 cover story of Governing, click to read "The $3 Trillion Challenge" by Katherine Barrett and Richard Greene. Also read the "Q&A With Experts," including one about risk management prescriptive steps by this blog's author, Susan Mangiero.
Editor's Note: GASB 45 is entitled "Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions."
