Unfunded liability: NH's chronic pension problemEDITORIAL
December 20. 2017 12:03AM
New Hampshire is doing better than most states in dealing with its public pension problem.
But that is not a high bar to clear.
A new report from the American Legislative Exchange Council finds that the total unfunded public pension liabilities of 280 state-administered pension plans now stands at more than $6 trillion.
ALEC uses more conservative assumptions than state pension planners on the investment returns of pension assets, but even using the optimistic assumptions baked into state systems, many state pension plans are on the verge of insolvency.
The New Hampshire Retirement System (NHRS) has more than $5 billion in promises that it can’t pay for. This is actually pretty good, compared to California’s $174 billion unfunded liability.
The New Hampshire Legislature took steps in 2013 to cover the NHRS unfunded liability. We’ll be slowly paying off the promises of past legislatures for another 22 years.
The ALEC report highlights efforts in Kentucky, North Carolina, and Nebraska to improve reporting and transparency of their state pension systems, as well as efforts in Arizona, Pennsylvania, and Michigan to reform their public-sector retirement systems.
New Hampshire avoided a pension crisis, but this should not deter lawmakers from exploring pension reform.