Niraj Chokshi, THE WASHINGTON POST
(The Washington Post) — The state pension shortfall is closing in on $1 trillion, according to new Pew Charitable Trusts research.
The gap between the benefits promised and funding available to state retirement systems rose by about 6 percent to $968 billion in 2013, the latest year for which data is available. That number is likely skewed a little high because it’s weighed down by losses from the Great Recession and hasn’t yet factored in some of the gains from the recovery. But even those gains will do little to offset that shortfall:
“State and local policymakers cannot count on investment returns over the long term to close this gap and instead need to put in place funding policies that put them on track to pay down pension debt,” the Pew authors say.
If states are going to close their funding gaps, they’ll have to make adequate annual contributions. But measuring those payments is easier said than done.