CARSON CITY — Nevada’s unfunded public pension liabilities have grown as a share of personal income from 2003 to 2013, reaching 11.8 percent in the most recent year in a national report released Tuesday by the Pew Charitable Trusts.
The report shows that Nevada’s unfunded pension liabilities totaled 4.9 percent as a share of personal income in 2003, and first hit double digits at 10.4 percent in 2010.
The comparison of unfunded pension costs to personal income is a snapshot in time, allowing for comparisons among states and providing insights into trends within states. If Nevada had paid off the unfunded obligation in 2013, it would have taken the equivalent of 11.8 percent of total personal income that year — from wages and salaries, employer-sponsored health and retirement benefits, income from owning a business, dividends, interest and more — to do so.
Forty-four states had better percentages than Nevada. Thirteen states had percentages in the double digits.
“Although states have decades to pay off these sums — or, in the case of retiree health care, make changes that reduce their liabilities — these claims on future revenue can limit states’ budget flexibility when the costs come due,” the Pew report said. “As part of a state’s full financial picture, these liabilities also can affect credit ratings and borrowing costs.”
Officials with the state Public Employees’ Retirement System had not seen the report and so had no comment.
The Pew report found that in 2013, states reported that they owed $968 billion in unfunded pension benefits — the equivalent of 6.9 percent of 50-state personal income. The report is its latest 50-state rankings on long-term obligations, including unpaid pension costs; unfunded retiree health care and benefits; and debt.
The report shows unfunded pension liabilities were highest in Alaska (23.7 percent of personal income), Illinois (16.8 percent), Mississippi and New Mexico (both 15.3 percent), and Kentucky (14.8 percent).
The lowest levels were in states with some of the best-funded pension plans: South Dakota and Wisconsin (both with unfunded liabilities less than 0.1 percent of personal income), and North Carolina and Tennessee (both 1 percent).
Nevada fared better in the measure of debt and unfunded retiree health care benefits.
Tax-supported debt was 1.6 percent of personal income, and health care costs were 1.2 percent of personal income in 2013, according to the report.
The Nevada Legislature in 2011 eliminated retiree health subsidies for state workers hired after Jan. 1, 2012.
Nevada’s total unfunded obligations in 2013 were 14.6 percent of personal income. Thirty-one states had lower overall percentages.
Pew reported Nevada’s underfunded public pension liability at $12.9 billion in 2013. The funded ratio was 69.3 percent, better than 25 other states. A few states have plans that are more than 90 percent funded.
Nevada’s plan, which covers more than 100,000 active public employees, has improved in recent years. The plan’s funding ratio reached 73.2 percent as of June 30.
Contact Sean Whaley at firstname.lastname@example.org or 775-461-3820. Find him on Twitter: @seanw801