Illinois the worst offender in new Pew Research Study

(New York Times) 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 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.”

The center based its measurements on data provided by the states as of June 30, 2008 — the most recent generally available — so any changes made since then would not have been factored into the scoring.

The data also did not capture the worst of the market crash, which occurred in the fall of 2008. Ms. Urahn said that as a result, the $1 trillion figure probably understated the problem.