June 26, 2011

Pew Issues Pension Report

THE PEW Research Center has issued a report on public pensions, "The Widening Gap: The Great Recession's Impact on State Pension and Retiree Health Care Costs." It analyzes 2009 and 2010 data on states' funding of pensions and retiree health care. The report shows how states' retirement systems--many of them already on shaky ground--were affected by the Great Recession:

* Pension funding shortfalls accounted for $660 billion of the $1.26 trillion gap, and unfunded retiree health care costs accounted for the remaining $635 billion.

* States had only about $31 billion, or five percent, saved toward their obligations for retiree health care benefits.

* State pension plans were 78 percent funded, declining from 84 percent in 2008.

“ILLINOIS RANKS at the bottom of all states in seriously underfunding its contributions to our pensions,” said Chair of the UIC Senate Faculty Affairs Committee Dr. John A. Shuler, Associate Professor and Bibliographer for Urban Planning and Government Information/Documents Librarian in a recent memo.

“WE DID not break the State budget because of our pensions,” he continued. “We contribute to the fund every month regardless of our economic circumstances. The State did not. It is that simple. The serious underfunding of our pensions began almost ten years ago; it is not a consequence of the current economic crisis. The only thing the most recent economic downturn did was complicate and deepen the failure.”

ACCORDING TO Pew, "The gap between the promises states have made for public employees' retirement benefits and the money set aside to pay for them grew to at least $1.26 trillion in fiscal year 2009--a 26% increase in one year.

SEE THE website http://www.pewcenteronthestates.org/initiatives_detail.aspx?initiativeID=85899358839.

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