Public pension costs swamp revenues of 10 U.S. states
Illinois has the largest pension liability
Tuesday, July 2, 2013
WASHINGTON, June 27 (Reuters) - Ten U.S. states have public pension liabilities that are at least as big as their annual revenues, according to a Moody's Investors Service report released on Thursday that found the Illinois pension bill was equal to 241 percent of its revenues.
The rating agency took a new approach to determining the health of public retirement systems by weighing each plan's net pension liability - the difference between the projected benefit payments and the assets set aside to cover those payments - against state revenue.
The typical discussion about how much money public pensions have is incomplete, said the author of the Moody's report, senior analyst Marcia Van Wagner. By comparing those amounts to states' revenues, though, the rating agency can get a better sense of states' abilities to pay for the obligations, she said.