02/18/2010 - Eight states have been given failing scores for their pension management under a new grading system developed by the Pew Center on the States, which also found a $1 trillion gap between what all 50 states have promised their workers and what they have set aside.
The Pew Center on the States said on Wednesday that Alaska, Colorado, Illinois, Kansas, Kentucky, Maryland, New Jersey and Oklahoma had, in essence, failed its new test because they made no meaningful progress on keeping their retiree benefit plans sound. The worst case was Illinois, with a $54 billion gap between the cost of the benefits it had promised to pay retirees over the next 30 years and the amount it had set aside.
"Recessions and investment losses played smaller roles in the creation of this problem," said Susan K. Urahn, the center's managing director. "To a significant degree, the $1 trillion gap reflects states' own policy choices and lack of discipline."
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