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Friday September 24, 2010

Illinois Leads Underfunded U.S. Pensions

To rank the municipal pension funding levels for the 50 U.S. states, Puerto Rico and Washington, D.C., the Bloomberg Municipal Data Team and the Municipal Fundamentals Team collected and supplemented data from The Comprehensive Annual Financial Reports, a set of government financial statements. Data is for states' respective fiscal year ends, current as of August 20, 2010. Percentages were calculated by dividing the fair value of plan assets by the projected benefit obligation. Where specific data was missing in the consolidated reported totals, the pension funds were contacted directly. States and individual pension funds that did not disclose sufficient data to warrant an accurate accounting are noted as "Not Available" in the ranking.

The data show that less than half the 50 state retirement systems had assets to pay for 80 percent of promised benefits in their 2009 fiscal years; two years earlier, only 19 missed the mark. Illinois covered just 50.6 percent of benefits last year, the lowest so-called funded ratio, which actuaries say shouldn't be less than 80 percent.

*Medians are net of states missing data: Colorado, Connecticut, Hawaii, Missouri, New Hampshire, Tennessee, Washington, Wisconsin, District of Columbia and Puerto Rico