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South Dakota State Pension 52% Funded: Third Best in U.S.!

Do all those South Dakota officials busted for corruption forfeit their pensions? Too bad for them if they do: South Dakota has one of the best-funded state pension systems in the country. Governing points us toward a new analysis from State Budget Solutions, which finds that nationwide, state public pension plans have assets that add up to only 39% of their liabilities. Everybody, retire slowly, please!

South Dakota is one of just four states whose funded ratio cracks 50%:

  1. Wisconsin: 57%
  2. North Carolina: 54%
  3. South Dakota: 52%
  4. Tennessee: 50%

California, whom our frugal governor regularly assails, has a pension funding ratio of 42%. The states down in the 20s are Kansas, Kentucky, Connecticut, and Illinois.

Break our unfunded pension liability down by population, and South Dakota's still looking pretty good. We rank tenth in unfunded pension liability per capita, $8,647, compared to the national average of $13,145. Ranking 42nd, California's per-capita liability is nearly double ours, $16,840. The worst state by this count is Alaska, where each resident would have to chip in $32,425 to cover their state pension's liability.

State Budget Solutions puts its state pension spreadsheet on Google Docs, bless their hearts! Their data show that South Dakota is much better off than some other states, but that we are all gambling on money we don't have yet.

10 Comments

  1. Testor15 2013.09.04

    The only reason South Dakota has a reasonably solid pension program was due to the changes put into effect while South Dakota had an experiment with two party politics 40 years ago. The mandates put into effect back then to the managers of the fund gave it solid footing. Steve Meyer was trusted to build on something solid called ethics.

    Oh to go back to something close to open government again.

  2. Michael Black 2013.09.04

    Why are we not at 75%-100%?

    There are going to be a lot of disappointed people that will not be getting the money they expected...if at all.

  3. Bob Mercer 2013.09.04

    Cory,

    I don't understand the methodology used to assemble this group's report. I do know state law is specific regarding annual reviews of the South Dakota Retirement System. The SDRS section of state code is chapter 3-12. I have never seen SDRS reported by the outside actuaries at a level as low as the report you cite. The report seems to be very low in comparison. Clearly SDRS is using a different measuring stick than this report uses. Maybe you can explain why the report's number for South Dakota is so much lower. That would help.

  4. Bob Mercer 2013.09.04

    Cory,

    Here is the link to the South Dakota CAFR for 2012. If you search for the word retirement, you will find the various ratio comparisons (actuarial and market). None of these is close to the numbers in the report cited above.
    http://bfm.sd.gov/cafr/SD_CAFR_2012.PDF

  5. Donald Pay 2013.09.04

    This is righty astroturf organization loosely affiliated with ALEC. I would not trust the data.

  6. Donald Pay 2013.09.04

    The goal of the business right is to scare people into dumping pensions so they can profit

  7. Troy Jones 2013.09.04

    There are multiple measures that often give the same answer to the informed analyst but are presented different for different audiences (not to deceive but to make it understood).

    1) Ratio of the aggregate total obligations/Funds on hand. This looks to be what was used above.

    2) Ratio of the actuarial obligations/Funds on hand (with assumptions with regard to future return on the funds on hand). This is what the SDRS uses which makes our system 92.6% funded. Before the recession of 2008, we were over 100% funded. The lower portfolio returns is what dropped us below the 100% level.

    In both cases, we are in good shape relative to others and we need to get a more normalized investment return to be back at 100%.

    Sidenote: Obama's wealth destruction rhetoric is not good for the SD Retirement System.

  8. caheidelberger Post author | 2013.09.04

    Bob: I'm working on it!

    Donald: if this org is ALECky, would they have fudged the numbers to make Walker's Wisconsin look good?

  9. Donald Pay 2013.09.04

    No. Wisconsin's good performance preceded Walker.

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