Two-Thirds of State Pensions Got Healthier in 2014


Two-thirds of state pension plans saw their funding improve in fiscal year 2014, according to data compiled by Bloomberg.

The median funding level of state plans improved as well, from 69.2 percent to 70 percent.

Among states, Wisconsin and South Dakota’s pension systems remained the healthiest. Illinois plans sported the worst funding in the country, with a collective funded ratio of 39 percent.

More from Bloomberg:

“It’s generally agreed that 2014 was mostly a year of improvement for public pension funds,” said Josh Gonze, who co-manages $10.5 billion of municipal bonds at Thornburg Investment Management in Santa Fe, New Mexico. Thornburg’s $7.3 billion Limited Term fund is the 13th largest open-end tax-exempt mutual fund, according to data compiled by Bloomberg.


Broad numbers mask big difference in the health of public pensions between states. Eight of 13 states whose funding level declined were states with below average funding levels.

“We have states that seem to be in genuine trouble,” Gonze said, listing Illinois, Kentucky, Alaska and New Jersey. “And clearly states that are not in any trouble at all.”

States that had the biggest improvement in funding include Idaho, whose, pension funding ratio rose 7.6 percentage points to 93.1 percent and Oklahoma, whose actuarial value of assets divided by actuarial accrued liabilities gained 6.5 percentage points to 73 percent.

In the last six years Idaho’s pension funding has improved by 19.2 percentage points, the most of any state, according to data compiled by Bloomberg.

Michigan’s pension funding ratio has declined the most during that period to 59.9 percent from 83.6 percent. Michigan is one of three states, including Alaska and Ohio that have more retired public employees than active members, according to Loop.

Pension plans returned a median of 16.9 percent on their investments in 2014, according to Bloomberg.

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