So we knew that when the new Government Accounting Standards Board requirements for public pension reporting came out, reported funding levels across the country would drop like a rock, but we didn’t really know how much.<\/p>\n

Turns out that the good folks at the Center for Retirement Research at Boston College did some of that work for us a couple of years ago, studying 127 public pensions<\/a> across the country.<\/p>\n

Remember, the new standards have two parts: pensions must report their holdings at current market value, and not average those values over 3-5 years as they had before. \u00a0And the unfunded liabilities, the portion that they do not believe are funded by current holdings, would have to be discounted at the long-term borrowing rate for the municipality involved, producing a blended rate likely lower than then expected return, and thereby decreasing the apparent funded level.<\/p>\n

As of 2009, the numbers for Colorado didn’t look good at all. \u00a0The school portion of PERA would fall from 65% funded to 52%, and the state portion from 63% to 48%. \u00a0With current funded levels slightly lower, the actuals are also likely lower now.<\/p>\n

It’s important to remember that these are accounting changes, and that the plans didn’t suddenly become less solvent overnight. \u00a0But as a better reflection of reality, they are still pretty sobering.
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