Excerpt:
Best and Worst States for Pensions by Joel Anderson. In this article for Yahoo! Finance, Anderson ranks the “best” and “worst” states for public pensions based on their unfunded liabilities. As we’ve written before, judging states based on their funded status is highly misleading. An unfunded liability is merely the difference between “the total amount of benefits owed to ALL current employees & retirees and the value of the financial assets the pension plan manages.” A pension system never needs all of that money at once because a fund has a long time to earn investment returns from what employers and employees contribute. Furthermore, each pension plan provides a Comprehensive Annual Financial Report (CAFR) that shows the vast majority of retired public employees stay in the state they worked in during their career, which means they are reinvesting their pension benefits into their local economies. Stories like this are best viewed skeptically compared with the facts about public pensions.
Author(s): Tristan Fitzpatrick
Publication Date: 27 August 2021
Publication Site: National Public Pension Coalition