States’ pension funds are better off today than they were during the Great Recession, but that doesn’t mean they’re healthy.
Russell Walker, Vice President of Wilshire Consulting, said “in the depths of the financial crisis … the funding ratio dropped down to 64 percent. That funding ratio is what’s known as the asset to liability ratio. That means for every $100 governments promised beneficiaries, they only held $64.”
But today that ratio is at around $80. The economy isn’t entirely to blame for that down-in-the-dumps number from 2009. Keith Brainard, research director for the National Association of State Retirement Administrators, said some states, like Illinois, Connecticut, and Kentucky, “have chronically shorted their pension contributions both when the economy was strong and when the economy was not so strong.”