| AUGUST 26, 2016
Most Pensions Falling Behind
A new analysis of state public pension plans this week shows that only one in three states are actually on a path to reduce their unfunded liabilities.
The report, by the Pew Charitable Trusts, used a new metric called net amortization, which essentially measures whether a pension plan’s accounting assumptions and payment schedule are holding up over time. Only 15 states are achieving positive amortization, according to Pew. In other words, they're following contribution policies that are sufficient to pay down pension debt. The remaining 35 states are facing negative amortization, or are following contribution policies that allow the funding gap to continue to grow.