Chicago's schools face a growing pension burden, as I noted before, in part because the state of Illinois has refused to do meaningful pension reform. On Reaclearmarkets today I look at this problem around the country, as 40 states have proclaimed in the last two years that they have made changes to their pension systems that supposedly will save billions of dollars, yet unfunded liabilities keep rising. Why? Because most of the reforms are superficial in nature and don't really attack the problem. One result is that payments by state and local governments into pension funds are soaring, as the chart below shows, and that's straining budgets.
Even worse, these funding increases fall short of what governments should be paying into their systems based on pension credits employees are earning, as the chart from Pew below shows. Only 18 states made their full "required" contribution into their pension fund in 2010, the last year for which figures are available.By the way, the 'percent funded' column in this chart is from funds' own generous assessments of their funded status. Using a more conservative market-based projection of investment returns lowers the funding status considerably in each pension system.