For the 10th time since initiating it in 1992, Wilshire Associates Inc. has produced a valuable report on the funding levels and asset allocations of state retirement systems. Disappointingly, however, the report leaves out data about the funding and asset allocation of each state plan that it used to provide.
The report now only aggregates the data of 125 state systems. This greatly reduces the usefulness of the report. While it helps the public and politicians to be aware of the aggregate funding level of public pension plans, it is far more useful to know which states are severely underfunding their pension obligations, that is, which states are sticking their taxpayers, now and in the future, with heavy burdens.
Of course, politicians don't want the funding levels of their pension plans generally known. That might expose them to pressure from taxpayers to slow the growth of pension obligations to public sector employees.
The data of the individual systems often are a matter of public record, but understanding what it means is beyond the skills of most taxpayers, and knowing how each state compares with its peers is impossible without the state-by-state comparison.
Wilshire has performed a valuable service aggregating and massaging the data into one easily accessible report that shows trends. But it's too bad Wilshire backed away from providing the more detailed snapshot analysis of individual systems.
Wilshire, whose business is consulting to many public and corporate plans, apparently made a business decision not to produce the individual plan data that caused distress to some public fund officials. A Wilshire spokeswoman commented: "Our reports have become extremely popular and are typically very well received. Unfortunately, the plan level data that we've provided in the past has sometimes been misused to pressure, embarrass and draw attention to individual plans. We believe that our decision to produce the report without listing individual plan data satisfies our objective of providing valuable industry information, while preventing the occasional misuse (of data)."
What's wrong with using the plan-level data to pressure or embarrass public officials into doing the right thing: Funding the plans properly so the true costs are apparent to the public? Now a vacuum exists that another major consulting firm should fill. That no firm has stepped in to fill it provides evidence of the enterprising work Wilshire set out to do.
But ending the detailed report does no long-term favor for the politicians or to the citizens of the laggard states. "Out of sight, out of mind" won't improve the funding of the plans. In fact, it is more likely to leave a system out of control and in desperate need of a sensible funding program.
More publicity about poor funding levels would help show the true cost of pensions, what the state can afford and what priority states have given pension funding compared with other spending programs.
Taxpayers and participants and other interested parties in some states are right to wonder about the real cost of poorly funded and run systems. They ultimately pay the cost.
