Connecticut State Retirement System

  • Connecticut holds the second highest debt per-capita rate in the United States at $35, 721.
  • Unfunded pension liabilities rose from 99.2 billion in the 2016 ALEC study to 127.7 billion in 2017, a one-year increase of 28 billion.
  • The state will be paying over 6 billion to the teacher’s retirement system alone by 2032 if the state fails to meet the discount rate of 8.5 percent
  • Fixed costs take over more than half of the state budget of Connecticut, with pensions, retirement costs and healthcare monopolizing a staggering amount of budget.
  • Connecticut has already faced two tax increases in response to the rise in costs, one in 2011 and the other in 2015. Neither has been enough to make a considerable difference in the pension crisis.

Resources:
Yankee Institute Report
Yankee Institute: Report on Unfunded Liabilities
Mercatus Center Fiscal Condition of Connecticut

South Carolina State Retirement Systems

  • South Carolina Retirement Systems currently hold $24 billion in pension debt and unfunded liabilities
  • The South Carolina pension crisis has been accredited to bad investing- the fund has underperformed their target returns by $10 billion while the state has paid more than $3 billion to Wall Street money managers
  • South Carolina allows for early retirements, 28 year retirements and high cost of living adjustments, adding to the already underfunded pension system debt.
  • For the past 15 years the South Carolina Retirement Systems fund has failed to make the full interest payment, leaving the state an additional $4 billion in debt
  • The total unfunded liability has grown by 6,686% since 1999 and shows no sign of slowing that upward trend.

Resources:
Mercatus Center South Carolina State Fiscal Health Report
Urban Institute Pension Fund Health Report
State Treasurer Report on Pension Fund Health

 

North Carolina State Retirement Systems

  • The State of North Carolina boasts one of the most stable pension systems in the United States at 92% funded
  • The return rate for the $98.3 billion pension fund for 2017 was 13.5%, a high rate accredited to responsible investing by the state treasurer and pension management
  • The State of North Carolina was able to save $60 million in 2017 thanks to a reduction in fees paid to fund managers, a promise given by manager Fowell in 2017.
  • The State fund pays the retirement benefits of 950,000 people
  • The retirement fund consists of both the State and Local Employees Retirement Systems, which are 1 and 95.9 percent funded, respectively.

Resources:
Morningstar Pension Fund Rankings
North Carolina Pension Fund Annual Report
Chief Investment Officer 2018 Report

 

Kentucky Retirement Systems

  • The State of Kentucky is more than $33 billion in debt, holding just $16 billion in total assets
  • The State retirement and health benefits system holds the retirement accounts of 360,000 state workers
  • The state retirement board in 2011 opted to invest in high-risk hedge funds instead of low-risk long term investments that are common for pension funds. Bridging the funding gap was referenced as the reason for the shift to high-risk investment
  • The Kentucky state pension system was $2.1 billion over-funded as of 2001, but now faces a dire situation of 13.6 percent of liabilities covered by the pension account
  • The Kentucky State Retirement System saw its funded liabilities drop from 16 percent in 2016 to just 13.6 percent funded in 2017. The prospects for fiscal year 2018 are even more dismal, as rate of return on investments are still too optimistic at 7%.

Resources:
S&P Market Strategies Report
Mercatus Center Report on Fiscal Health
Saving Kentucky’s Pension Report

California State Pension System (CalPERS and CalSTRS)

Resources:
Mercatus Center
CalPERS Annual Report 2017
CalSTRS Annual Report 2017

Illinois State Retirement Fund

 

Pew Research Center on Illinois Pensions

Illinois Policy Center

Mercatus Center on Illinois Pension

New York City Pension Fund

New York City Pension Fund

 

  • New York City officials estimate the pension debt at $65 billion, but the Manhattan Institute estimates the debt at $142 billion
  • New York City pension plans assess the return on long-term pension investments to be 7%, when the real return on long term bond investments is closer to 2%.
  • Today, 11% of the budget of New York City is devoted to servicing the pension plans of its retirees
  • New York City increased benefits to retirees in the early 2000’s – without the funding to do so. That move has costed the city more than $13 billion to the pension bill in the decade following.
  • New York City made a new rule in the early 2000’s that exempted most city employees for having to contribute to their pension plan during their employment.

 

Manhattan Institute on New York Pension

Pew Research on New York City Pensions

New Jersey State Pension Fund and New Jersey State Cash Management Fund

  • The New Jersey state pension system is comprised of seven public service pension funds.
  • As of January 2018, that State of New Jersey Pension Fund possessed assets that covered 30 percent of outstanding liabilities, below the 40 percent mark that the Rockefeller Institute deems “crisis level”
  • The New Jersey State Pension Fund is the most under-funded in America with $124 Billion dollars in debt heading into 2018
  • According to the new accounting standards introduced by WNYC, the total pension debt is $253 billion dollars as of 2018. The total state budget for New Jersey is $35 Billion.
  • By 2023 the state will be liable for $11.3 billion dollars of pension benefits, amounting to 27 percent of the total budget for the state
  • The Urban Institute Pension Report Card gave the New Jersey State Pension Fund a rating of “D”

Resources:
Pew Report on New Jersey’s Pension Fund
Mercatus Institute on New Jersey’s Pension Fund
Urban Institute on New Jersey’s Pension Fund
Manhattan Institute Report on New Jersey Pension Fund

Manhattan Institute: The Public Pension Problem: It’s Much Worse than It Appears

Taxpayer-funded contributions to government pensions can make up one the largest single elements in a local budget. Manhattan Institute scholars have consistently pushed for governments to reform their pension system and thus avoid the necessity of cutting public services.

View the article: Manhattan Institute: The Public Pension Problem: It’s Much Worse than It Appears

Press-Republican: Cuomo ignites pension fund debate with divestment push

But the governor’s move has spawned concerns that a green energy litmus test over investment decisions could end up limiting the fund’s growth should Cuomo’s prognostications regarding energy sector stocks prove to be flawed. “The comptroller needs to stick to his guns and understand that his fiduciary responsibility is to the beneficiaries” of the fund, said Christopher Burnham, the former Connecticut state treasurer who served as the sole trustee of the Nutmeg State’s pension fund from 1995 to 1997.

 

“You have to invest these monies cautiously, carefully and wisely, and without allowing a personal agenda to play a role in how you execute your duties,” said Burnham, a Republican and native New Yorker who is chairman of Cambridge Global Advisors in Virginia. DiNapoli and Cuomo are downstate Democrats, though at times the relationship between the two has been chilly. Since Cuomo advanced his pension proposal, the comptroller has avoided arguing with the governor over the issue, instead signaling that he welcomes the “opportunity to partner” with Cuomo via an advisory council aimed at “achieving investment returns.”