State Budgets

Underfunded Retirement Plans at the State Level: Nick Stark on Voice of Reason

We recently just released a report on Other Post Employment Benefit liabilities. In the same vein as the pension plan, this relates to things like the health care plan, and other benefits.

Nick Stark, ALEC Tax and Fiscal Policy Task Force Director, was interviewed by Andy Hooser of Voice of Reason discussing states’ retirement plans, rankings nationwide, addressing debt issues, and outlining the factors measured by ALEC when examining these unfunded liabilities.

One of the things to kind of look at, when you talk about how well these things are funded, it’s things like the funding ratios.  You have the outstanding liabilities and then the percentage of that that’s funded, and most of the states don’t even have 50% of their unfunded liabilities funded each year.

You’re legally obligated, either through the statutes in your state or through the Constitution, to pay down and pay out these pensions for future years. That number can balloon and if you’ve got somebody that is 25 just entering the workforce, and they’re going to work for the next 50 years of their life let’s say, they’re going to expect to collect benefits. That’s a lot of accrued benefits.

Listen to the full interview.

In Depth: State Budgets

Smart budgeting is vital to a state’s financial health. The ALEC State Budget Reform Toolkit offers more than 20 policy ideas for addressing today’s shortfalls in a forthright manner, without resorting to budget gimmicks or damaging tax increases. One way to stabilize budgets over time is to embrace…

+ State Budgets In Depth