From Thomson Reuters – Re-Blogged From Newsmax
U.S. state unfunded pension liabilities hit $1.3 trillion in fiscal 2016, a $56 billion or 4.5 percent increase over the previous fiscal year, Moody’s Investors Service reported.
The credit rating agency attributed the higher adjusted net pension liability for the 50 states to underperforming investment returns, low interest rates and insufficient contributions to retirement systems for government workers.
“About half the states are also not making sufficient payments to pension systems to prevent their unfunded liabilities from growing even if investment targets are met,” Moody’s said in a statement.
It projected the liability will grow again in fiscal 2017 to $1.7 trillion.
Overall, fiscal 2016’s $1.3 trillion unfunded liability equaled 122 percent of state revenue.
Illinois, which has been hindered by its state constitution from reducing retirement benefits to cut pension costs, had the biggest unfunded liability in fiscal 2016 equal to 487 percent of its revenue versus a median of 82 percent for all states. Alaska came in second at 443 percent of revenue, followed by Connecticut at 285 percent.
In terms of percentage of revenue, North Carolina’s pension liability was the lowest at 23.6 percent, Moody’s reported.
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