K-12 Tax & Spending Climate: Illinois pension bill was equal to 241 percent of its revenues

Reuters:

Ten U.S. states have public pension liabilities that are at least as big as their annual revenues, according to aMoody's Investors Service report released on Thursday that found the Illinois pension bill was equal to 241 percent of its revenues.

The rating agency took a new approach to determining the health of public retirement systems by weighing each plan's net pension liability - the difference between the projected benefit payments and the assets set aside to cover those payments - against state revenue.

The typical discussion about how much money public pensions have is incomplete, said the author of the Moody's report, senior analyst Marcia Van Wagner. By comparing those amounts to states' revenues, though, the rating agency can get a better sense of states' abilities to pay for the obligations, she said.

For many of the states that ability is very limited. In nearly half, the pension liability is equal to half the state's annual revenue.

After Illinois, Connecticut had the highest pension burden in the country, with a pension liability equal to 189.7 percent of revenues. That was followed by Kentucky, at 140.9 percent; New Jersey, 137.2 percent; Hawaii, 132.5 percent; and Louisiana, s 130.2 percent. Colorado's net pension liability was slightly more than revenues at 117.5 percent and Maryland's slightly less at 99.5 percent.

Posted by Jim Zellmer at July 3, 2013 12:10 AM
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