New Jersey is among seven states that have consistently underfunded the retirement plans of their public workers, according to a recent study by the Pew Center on the States. The center predicted that states on the bottom half of the list would have to choose between pension obligations and other public programs, as New Jersey has done.
Roughly half the states have underfunded pensions, which constitute the bulk of the nation’s retirement bill. The 50 states together have to pay out more than $2.7 trillion to cover their pension obligations for the next 30 years.
Only six states are on track to fully fund retiree benefits: Arizona, North Dakota, Ohio, Oregon, Utah and Wisconsin. In addition to New Jersey, states that have consistently fallen behind include Colorado, Illinois, Kansas, Michigan, Oklahoma and Washington.
Unlike companies, state and local governments are not subject to federal pension laws, which set uniform funding standards.
The full report and 50 state fact sheets are available online at www.pewcenteronthestates.org.