The funded ratio of the Arizona public pension plan ranked 39th in the nation, according to a new analysis from the Tax Foundation based on fiscal-year 2017 data.
The state’s pension fund is 62 percent funded, the Tax Foundation study found. The percentage was calculated by comparing the market value of the pension fund’s assets to its accrued pension liabilities.
The analysis is based on data released by the Pew Charitable Trusts.
A low ratio points to the state’s pension system being not well-funded, and higher ratio means that pension fund assets are keeping up with liabilities, according to the Tax Foundation.
Historically, state pension funds were classified as defined-benefit plans, which guarantee retiring members an annuity for life. More recently, however, states have created defined-contribution plans for new hires, allowing workers to oversee individual accounts and helping states to reduce liabilities over time, the analysis said.
State Pension Plan Funding Percentages, From Highest to Lowest
|Rank||State||Funded Ratio of State Public Pension Plans|
Source: Tax Foundation and the Pew Charitable Trusts