U.S. Pensions Solve New Debt Equation. Answers Vary by Billions
- Kentucky gives lawmakers one number, investors another
- New rules make funding levels look worse then they did before
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When Kentucky Governor Matt Bevin proposed his budget in January, he told lawmakers the teacher retirement system had $13.9 billion less than needed to cover promised pension benefits. The state’s audited financial statements earlier estimated the shortfall was about 55 percent larger, at $21.6 billion.
The discrepancy for the pension that serves 122,000 current and former school workers didn’t result from a secret investment windfall that slashed its debt. It’s because of a gulf that’s emerged between official figures that are disclosed to municipal-bond investors -- and those states and cities can rely upon when deciding how much they need to pay into their retirement funds.