A recent study ranks state pensions based on their financial health, finding that some are more fiscally sound than others, as reported by Governing.
A study by investment research firm Morningstar, Inc., published earlier this week assesses the financial health of each state system, highlighting a wide disparity in the actuarial adequacy of funding levels.
An alarming number of funds face a steep uphill climb in fully funding their plans. The report found 21 states’ aggregate funded ratios fell below 70 percent, which Morningstar considers the threshold for “fiscally sound” systems. Illinois (43.4 percent), Kentucky (50.5 percent) and Connecticut (53.4 percent) registered the lowest funding levels of all examined.
Morningstar used data from comprehensive annual financial reports up to 2011. The Comprehensive Annual Financial Report for the Maryland State Retirement and Pension System for the year ended June 30, 2011 reported a funded status ratio of 64.7%, just below the study’s 70% “fiscally sound” threshold.