Florida Retirees Can Relax – State Pension Plan Still “Strong”

Many of our retired clients, including teachers and other public servants, receive monthly pensions from the Florida Retirement System, and many more expect to receive pension benefits in the future when they retire.

So they’ll be relieved to hear that the Florida pension system is still rated as “strong” by researchers at Morningstar, which recently analyzed current data for pension plans administered by all 50 states.

Morningstar ranked the plans on several criteria, including their funded ratio, measuring the ability of a pension plan to meet its obligations (calculated by dividing the pension plan’s assets by its liabilities). A funding level of more than 80% is considered good.

The weakest plan in the survey?  Illinois. The state has funded only 43.4% of its future liabilities, leaving each citizen in the state with an unfunded liability of $6,505 per resident.

Also worth noting? Florida has slipped down the list over the last few years.  In 2007, it had put aside more than 105% of its liabilities.  Now that figure has dropped to 86.9%, a painful result of  the Great Recession and the real estate collapse.

Here’s the ranking of the top 10 plans.

1. Wisconsin             Funded ratio 2011 99.8% – Funded ratio 2007 99.6%
2. Washington        Funded ratio 2011 98.1% – Funded ratio 2007 90.4%
3. South Dakota      Funded ratio 2011 96.3% – Funded ratio 2007 97.5%
4. North Carolina   Funded ratio 2011 95.3% – Funded ratio 2007 106.0%
5. Tennessee             Funded ratio 2011 92.1% – Funded ratio 2007 96.2%
6. Delaware              Funded ratio 2011 90.7% – Funded ratio 2007 98.8%
7. New York             Funded ratio 2011 90.5% – Funded ratio 2007 105.9%8
8. Idaho                      Funded ratio 2011 89.9% – Funded ratio 2007 104.6%
9. Florida                   Funded ratio 2011 86.9% – Funded ratio 2007 105.6%
10. Oregon                   Funded ratio 2011 86.9% – Funded ratio 2007 110.5%