The Trillion Dollar Gap: Virginia
Underfunded State Retirement Systems and the Roads to Reform
Virginia needs to improve how it manages its long-term pension liability, but is doing a relatively good job of handling the bill coming due for its retiree health care and other benefits. Virginia has fallen short of meeting its actuarially required contributions, although it did slightly increase the amount set aside in 2008. While the state has funded 84 percent of its total pension bill—above the 80 percent benchmark that the U.S. Government Accountability Office says is preferred by experts—the health of the system has declined sharply in recent years.
Meanwhile, Virginia ranks fourth in the country in terms of the percentage of longterm liability for retiree health care and other non-pension benefits that is funded, with $1.3 billion set aside to cover a bill coming due of nearly $4 billion.