Kane Board Chairman: Unfunded State Pension Liabilities Are ‘Fiscal Calamity’
Kane County Board Chairman Chris Lauzen issued a news release today (Dec. 20, 2017) calling U.S. states’ combined $6 trillion unfunded pension liabilities a “fiscal calamity” that threatens local governments.
The news release cited Unaffordable and Unaccountable 2017, a report by the American Legislative Exchange Council.
According to the report, Illinois ranks 48th of 50 states, with $388,342,219,355 in unfunded liabilities of public pension plans.
“The fiscal calamity facing state pensions is far deeper than previously thought,” the release said. “These real liabilities threaten local governments, like Kane County, in their ability to issue bonds at favorable rates, to maintain credibility with constituents, and to not get costs passed onto them by state governments like what happened in Illinois in 2017.
“Taxpayers, workers and retirees will all share in the burden unless policymakers make significant changes.”
According to Jonathan Williams, vice president of the ALEC Center for State Fiscal Reform and co-author of the report, unfunded liabilities exceed $6 trillion.
“Absent serious reforms, unfunded liabilities will continue to grow and threaten the financial security of state retirees and taxpayers, the release said.
Williams’ calculations are based on more prudent rates of return than state and local governments typically use, the news release said.
Unaffordable and Unaccountable 2017 surveyed more than 280 state-administered public pension plans. In terms of pension funding ratios, Connecticut is the worst and Wisconsin is doing the best.
SOURCE: Kane County news release