California public pension funds had a combined $490 billion in obligations in fiscal 2008-09 and enough assets on hand to cover 81 percent of those promises, according to a new report.
But the state's overall public employee retiree health care liabilities reached $66.6 billion with virtually no money set aside for those future obligations, according to the survey by Pew Center on the States.
"The Widening Gap: The Great Recession's Impact on State Pension and Retiree Health Care Costs" also says that California should have paid $12.4 billion into its public retirement funds that year but paid only about 82 percent of that.
The Pew analysis drew immediate criticism from unions and researchers who support defined benefit public pensions for using outdated figures that include the nadir of the national financial crisis, the September 2008 banking crisis and stock market meltdown.
The study shows that the national gap between what states set aside for pensions and retiree health care grew 26 percent in one year to $1.26 trillion. Pew said it used the most recent data available from the states to make its calculations, which are conservative compared with some estimates.
Experts generally agree that the healthy pension funds have assets equal to at least 80 percent of long-term pension obligations. Nationally, the percentage of state pensions that hit that mark dropped from 84 percent in fiscal year 2008 to 78 percent in fiscal year 2009, Pew said.
Hank Kim, executive director and counsel for the National Conference on Public Employee Retirement Systems, a public pension lobbying organization based in Washington, D.C., hammered the report shortly after its Tuesday publication:
"The new Pew report relies on 2009 data - data from a low point in the recent historic market downturn," Kim said in a press release. "That data is outdated. Much has changed in the last 18 months - virtually all of it for the better."
NCPERS got out ahead of the Pew Report on Monday with a release that references its own survey that indicates pension funds are quickly recovering lost assets.
Californians for Health Care and Retirement Security, a labor coalition, fired off a response to the Pew study: "Like so many sectors of the economy, pension trusts have fluctuated dramatically in recent years. It would be irresponsible to base major policy decisions based on short-term and outdated information," CHCRS Chairman Dave Low said in a Tuesday press release.
The CHCRS response mentions a new report by the National Association of State Retirement Administrators and the National Council on Teacher Retirement that shows solid fund investment returns in 2009-10.
That report, however, didn't address the obligation growth side of the pension ledger, which the Pew study does.