The 10 Worst State Pension Funds

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If you receive a pension, you’re likely depending on this money to get you through retirement. These plans help bridge the gap for workers who may otherwise not have the means to retire within their desired time frame, or at all.

Unfortunately, some state pension plans are experiencing a crisis. Governments are facing the challenge of keeping their budgets balanced while also fulfilling pension obligations. This is very bad news for the baby boomer employees within the public sector who are hoping to retire soon. Roughly 52% of boomers have already left the workforce, an increase from 45% four years ago.

Among the 50 states, Illinois has the highest pension liability per state resident, at $7,636.64, according to NerdWallet, which recently analyzed the health of the country’s pension funds. The report found that of all the states, 37 have pension funds that are below the Government Accountability Office’s definition of health. A pension fund is considered healthy if it has at least 80% funding. The states on this list fall significantly below that level.

The state pension funds that are considered the worst have funding below 80%, a high payroll contribution level, high pension liability per resident, and a low number of payments available. Take a look at the 10 worst state pension funds according to NerdWallet. Is your state on the list?

The 10 worst state pension funds

 

10. West Virginia

  • Percent of pension funded: 65%
  • Total contributions as a percent of payroll: 29.3%
  • Pension liability per state resident: $3,033.85
  • Years of payments available: 10.67

 9. Louisiana

  • Percent of pension funded: 62%
  • Total contributions as a percent of payroll: 33.6%
  • Pension liability per state resident: $4,453.29
  • Years of payments available: 10.17

8. Michigan

  • Percent of pension funded: 60%
  • Total contributions as a percent of payroll: 21.6%
  • Pension liability per state resident: $3,673.94
  • Years of payments available: 8.80

7. Rhode Island

  • Percent of pension funded: 60%
  • Total contributions as a percent of payroll: 29.5%
  • Pension liability per state resident: $4,640.95
  • Years of payments available: 7.93

6. Pennsylvania

  • Percent of pension funded: 57%
  • Total contributions as a percent of payroll: 14.4%
  • Pension liability per state resident: $4,381.90
  • Years of payments available: 8.01

5. New Jersey

  • Percent of pension funded: 55%
  • Total contributions as a percent of payroll: 16.4%
  • Pension liability per state resident: $6,447.26
  • Years of payments available: 8.23

4. Alaska

  • Percent of pension funded: 53%
  • Total contributions as a percent of payroll: 31.6%
  • Pension liability per state resident: $11,028.20
  • Years of payments available: 9.35

3. Kentucky

  • Percent of pension funded: 50%
  • Total contributions as a percent of payroll: 21.6%
  • Pension liability per state resident: $5,906.96
  • Years of payments available: 8.12

2. Connecticut

  • Percent of Pension Funded: 49%
  • Total contributions as a percent of payroll: 25.7%
  • Pension liability per state resident: $7,027.28
  • Years of payments available: 7.52

1. Illinois

  • Percent of pension funded: 47%
  • Total contributions as a percent of payroll: 31.9%
  • Pension liability per state resident: $7,636.64
  • Years of payments available: 8.82

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