ST. PAUL, Minn. -- The Pew Center on the States released some startling numbers on Tuesday. Researchers say in 2010, states were almost $1.4 trillion short on paying for promises made on public pensions and retiring health care. "This problem has been a decade in the making," lead researcher David Draine said.
Draine also said Minnesota wasn't in great shape.
"The state was not able to make the full recommended contribution to pay for those benefits in 2010," he said. The study showed Minnesota's state retirement plans had a liability of $58.8 billion, saying the state fell behind by $13 billion on setting money aside to pay for it.
"The numbers appear to be generally accurate," said Larry Martin, Executive Director of Minnesota's Legislative Commission on Pensions and Retirement. He showed KARE 11 the 2010 numbers, which included $13 billion in "unfunded accrued liability." "It's good to know, but that's not the only measure."
The Actuarial Value of Assets chart he provided showed a whole host of numbers below that unfunded accrued liability. After adding in several financing requirement numbers, Martin emphasized the final two numbers on his chart. He pointed out $2.15 billion in total requirements and $1.9 billion in total contributions in 2010. The deficiency was about $250 million. "It's not as alarming as the Pew report seems to make it," Martin said.
Martin urged us to look the system like a home mortgage. He says the state has the money to pay the bill every month. In fact, he is in line to draw on that pension in the near future and he says he's not worried. For state employees who may be worried, he says "pull up the website of whichever pension you look at and you happen to be in and look at the annual financial reports for more than just a couple of years."
In 2010, state lawmakers adopted changes to address the retirement funding gap, including increasing employee contributions. Those changes are not reflected in these recent studies and charts.
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