Table 1
Net amortization process in 4 states, 2014 and 2021
| Kentucky | Pennsylvania | South Carolina | West Virginia | |||||
|---|---|---|---|---|---|---|---|---|
| 2014 | 2021 | 2014 | 2021 | 2014 | 2021 | 2014 | 2021 | |
| Paid the ADEC? | No | Yes | No | Yes | Yes | Yes | Yes | Yes |
| Starting unfunded | $32,206 | $30,343 | $54,599 | $66,465 | $20,225 | $29,187 | $5,220 | $3,777 |
| Discount rate | 5.93% | 6.37% | 7.50% | 7.19% | 7.50% | 7.25% | 7.50% | 7.50% |
| Service cost | $1,166 | $780 | $3,083 | $2,888 | $895 | $1,245 | $291 | $292 |
| Interest on pension debt | $1,908 | $1,933 | $4,095 | $4,776 | $1,517 | $2,116 | $392 | $283 |
| Employee contribution | $435 | $460 | $1,382 | $1,538 | $779 | $1,127 | $162 | $187 |
| Net amortization benchmark | $2,639 | $2,252 | $5,796 | $6,125 | $1,633 | $2,235 | $520 | $388 |
| Employer contribution | $934 | $2,485 | $3,189 | $7,898 | $1,179 | $2,144 | $769 | $624 |
| Net amortization | -$1,705 | $233 | -$2,607 | $1,773 | -$455 | -$91 | $249 | $236 |
| Employer contribution/ payroll | 18% | 47% | 17% | 38% | 14% | 19% | 26% | 19% |
| Net amort/payroll | 50% | 42% | 31% | 30% | 19% | 20% | 18% | 12% |
| Shortfall/payroll | 33% | -4% | 14% | -9% | 5% | 1% | -9% | -7% |
| Covered payroll | $5,232 | $5,335 | $18,481 | $20,560 | $8,491 | $11,261 | $2,926 | $3,224 |
| Expected unfunded | $33,911 | $30,110 | $57,206 | $64,692 | $20,680 | $29,278 | $4,971 | $3,541 |
| Actual unfunded | $31,386 | $27,973 | $54,438 | $53,762 | $19,328 | $24,503 | $3,820 | $448 |
| Note: All dollar figures are in millions. “Actuarially determined employer contributions” (ADEC) are as reported by the pension plan based on calculations by the plan actuary. “Expected unfunded” is what the pension debt would have been if all assumptions proved true and no policies were changed that year; “actual unfunded” is the reported pension debt at the end of the year after including unexpected investment performance and demographic experience. Shortfall as a share of payroll represents how much the employer contribution rate would need to increase to meet the net amortization benchmark; negative values indicate that contributions are above the benchmark.
Source: State and pension plan financial reports and actuarial valuations |