(Bloomberg) — Funding for U.S. state retirement plans fell for a fourth straight year as insufficient contributions and inadequate investment gains overwhelmed cuts that more than 40 legislatures have made to benefits since 2007. As public plans diverge from private in terms of equity vs. fixed-income, participants and taxpayers are caught in the crossfire.
The median public funding ratio was 71.7% for the year through June 2011, down from 74.3% the prior period, data compiled by Bloomberg show. Taxpayers in Illinois, the weakest of the group for the fourth straight year at 43.4%, are paying the price: the relative borrowing cost of the state and its localities is almost double the five-year average.
