U.S. state pension funding ratios have improved slightly, a report from Standard & Poor's Ratings Services said.
According to Standard & Poor's latest annual analysis of the 50 states based on 2013 valuations, U.S. state pension funding ratios averaged 71.2%, a small improvement from the previous year's average of 70.9%. Also, 26 states in 2013 either maintained or increased their funding ratios, compared with 12 the previous year.
Despite this improvement, 24 states still saw their funding ratios decline despite the strong market performance of 2013. The gap between the median and mean plan was only 2.77% in 2013, down from 4.6%, an indication that the gap between well-funded systems and poorly funded systems is narrowing compared to recent years.
S&P also mentioned that credit quality is correlated with funding ratios. Specifically, of the 50 states, all four states with negative outlooks have ratios below 70%.
Wisconsin had the best-funded pension plans at 99.94%, followed by South Dakota at 99.93%, Oregon at 97.08%, North Carolina at 95.95% and Tennessee at 93.64%.