State pension plans' aggregate funding ratio declined to 78% in the fiscal year ended June 30, 2009, dropping six percentage points from a year earlier, according to the Pew Center on the States.
Pew's report, “The Widening Gap: The Great Recession's Impact on State Pension and Retiree Health Care Costs,” shows that the public plans collectively held $2.28 trillion in assets and $2.94 trillion in liabilities for a shortfall of about $660 billion. The report includes fiscal year 2010 data for 16 states.
New York had the best funding ratio of all 50 states at 101%, while Illinois' pension plans were the worst at 51%. Thirty-one states were less than 80% funded.
“In many states, the bill for public-sector retirement benefits already threatens strained budgets, and is competing for resources with other critical needs, including educations, infrastructure and health care,” Susan Urahn, Pew managing director, said in a news conference releasing the report's findings.
The report notes that in 2010, at least 19 states took legislative action to reduce their liabilities.