Average funding of state retirement systems rose to 116% last year from 92% in 1996, according to a new study by Wilshire Associates. In that period, total state retirement assets more than doubled to $1.7 trillion, while liabilities rose 65% to $1.5 trillion. Public pension systems, however, still lag the largest 100 corporate plans, whose average level of funding was 126% in 2000.
Some state retirement systems still are short of assets, though aggregate underfunding was cut in half to $50 billion during the four-year period. The worst offenders, on a percentage basis: West Virginia Teachers Defined Benefit Retirement System, Charleston, was only 21% funded; Indiana State Teachers Retirement Fund, Indianapolis, 39%; and District of Columbia Retirement Board, Washington, 58%. On a dollar basis, Illinois State Teachers Retirement System, Springfield, had the biggest shortfall, $11.4 billion; followed by Indiana STRF, $7.7 billion; and West Virginia and Oklahoma Teachers Retirement System, Oklahoma City, both $3.8 billion shy of full funding.
The best-funded systems, on a percentage basis, were Delaware Public Employees Retirement System, Dover, 144%; and Florida State Board of Administration, Tallahassee, 140%. New Jersey Division of Investment, Trenton; New York State Common Retirement Fund, Albany; and Arizona State Retirement System, Phoenix, were tied at 139%. But the giant California Public Employees Retirement System, Sacramento, had the biggest surplus in dollar terms: $43.6 billion. It was followed by New York State Common, at $36.3 billion, and Florida, at $27.6 billion.