This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Morningstar Finds Wisconsin The Strongest-Funded Pension System And Illinois The Weakest For The Second Year In A Row Among States; Puerto Rico The Weakest Overall

CHICAGO, Sept. 16, 2013 /PRNewswire/ -- Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, today published the 2013 edition of its research report, "The State of State Pension Plans," which analyzed current data for pension plans administered by all 50 states. New this year, Morningstar also included an analysis of the pension plan administered by the Commonwealth of Puerto Rico. Morningstar's municipal credit analysts found that based on two key funding metrics, the state of Wisconsin had the strongest-funded state pension plan system while Illinois had the weakest among all 50 states, for the second year in a row. However, Puerto Rico ranked the weakest among all the pension systems evaluated by Morningstar.

Morningstar's pension plan analysis focused on two key metrics:
  • Funded Ratio: the ability of a pension plan to meet its obligations, which is calculated by dividing the pension plan's assets by its liabilities, and
  • Unfunded Actuarial Accrued Liability (UAAL) Per Capita: the unfunded liability per capita, representing the amount each person in the state would need to pay to fully fund this unfunded liability.

"Pension plans are inherently challenging to understand because of their complexity, weak disclosure requirements, and their sheer number. In addition, pension accounting is filled with assumptions, which leads to a lot of uncertainty. During the last few years, there has been a lot of negative attention focused on pensions, but new standards approved by the Governmental Accounting Standards Board could spark some significant changes," Rachel Barkley, municipal credit analyst for Morningstar, said. "We've seen the funded levels of state pension plans continue to decline during the last year, albeit modestly, and the bankruptcy filings of San Bernardino, Calif. and Detroit, Mich. may have significant effects on the national level.

"On the upside, recent data indicate that long-term investment returns are generally in line with assumptions used by most pension plans. Additionally, in recent years most states have implemented some level of pension reforms."

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

Chart of I:DJI
DOW 16,654.77 +369.26 2.27%
S&P 500 1,987.66 +47.15 2.43%
NASDAQ 4,812.7080 +115.1720 2.45%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs