Census State Pension Survey 2007-2010
The U.S. Census collects key data from selected state and municipal pension funds every year. Data in the tables attached here covers the 222 largest state administered defined benefit pension funds from fiscal years 2007 through 2010. The tables below, one for each of the 50 states, represent consolidation and analysis of six Census categories.
These tables show the critical four-year performance of state administered pension funds. The tables confirm that those funds are locked into a downward spiral from which they never can recover without trillions of dollars in additional “contributions” from taxpayers, either directly through governments or state and municipal employees.
Defined benefit pension funds with guaranteed payments based on years of service and final pay are supposed to invest enough money every year to pay all future benefits earned in that year. States discount the amount of money invested to pay future benefits based on an assumption of growth in those investments every year and the ability of the fund to pay promised benefits from earnings and investment growth every year. Any time earnings and investments fall short, taxpayers must make up the difference, plus the assumed discount rate.
For every year investments and contributions fall short, the amount taxpayers owe compounds at the assumed discount rate. If any current year contributions are used to pay benefits, taxpayers eventually must make up that difference, too. The obligation grows every year no matter how investments perform. Once pension fund investments fall behind as far as they did in this period, they never can recover.
For example, in the Maryland spreadsheet, it is clear from the top section that at the required 7.75 percent official discount rate, Total Holdings fell more than $21 billion short by 2010, requiring a 70.9 percent gain in 2011 just to stay even with the amount needed to pay promised benefits.
Total Holdings shows a real decline of $8.6 billion, 21.1 percent, over the four fiscal year period ending June 30 when the investments should have gained almost 34 percent.
Total Earnings – Total Payments shows that the funds paid out$8.3 billion more than they received in contributions and earnings when earning should have paid all benefits and costs.
Earnings show earnings on investments each year, including (losses), net earnings and Return on Investment over the four years
Obligation shows how much in promised pension benefits increased each year and over the four year period. Obligation is considered deferred compensation earned by employees, and each year as it is earned governments must set aside sufficient funds, based on projected earnings and growth, to pay those benefits in the future. Even though investments dropped 8.6 percent in valued, had a net loss of $8.3 billion and only 0.65 percent ROI, total obligation increased 10.5 percent to more than $54 billion.
Covered Payroll shows how much the pay upon which future pension benefits are determined increased over the four-year period.
Membership shows the increase in the number of employees eligible for pensions.
Active are the number of employees working in the system.
Inactive are the number of people covered by pensions who are not working or receiving benefits
Total beneficiaries are the number of people receiving pensions who must be paid through earnings and “contributions” from taxpayers through governments and public employees. If the number of active members and their “contributions” fails to keep pace with beneficiaries receiving benefits, somebody has to pay the difference.
Total contributions show the amount of money “contributed” each year by taxpayers through governments and public workers.
Employee, state government, local government and total government contributions break down the amount “contributed” by each.
The “lost for every $ contributed” lines show how much fund manager lost for every dollar “contributed” by category over the survey period.
Total payments include all direct expenditures by the pension systems and the increase or decrease over the sample period.
Benefits are actual benefits paid to retirees.
Withdrawals show those who left the system and took out earned benefits and contributions.
Other payments represent direct expenses of the pension systems.
T benefits are the total of pension benefits paid.
Av # of beneficiaries is the average annual number of people receiving pension benefits.
Av. Annual benefit is how much the average retired worker receives each year.
Find your state’s pension historical trends below:
Data are are from the latest U.S. Census Bureau Annual Survey of Public-Employee Retirement Systems. The interpolation spreadsheets are by State Budget Solutions. The Census data can be found here.