The Trillion Dollar Gap: Maine

Underfunded State Retirement Systems and the Roads to Reform

The Trillion Dollar Gap: Maine

Maine is managing its long-term pension liability well, but needs to improve how it handles the bill coming due for its retiree health care and other benefits.

The state's pension obligations were only 63 percent funded in 1997 but by 2008 were 80 percent covered—the minimum benchmark that the U.S. Government Accountability Office says is preferred by experts—by consistently keeping up with its actuarially required contributions. In 2002, Maine passed a law mandating that the annual rate of payment made to the State Retirement System cannot be less than the amount paid in the preceding year.

Meanwhile, Maine has a $4.4 billion bill coming due for its retiree health care and other benefits. While the state is one of 29 with any assets set aside to cover these long-term costs, only 1.2 percent of this total is funded.