If a picture paints a 1,000 words then how many words does the above chart produce? There are quite a few public systems that are in decent to good shape on an actuarial basis, and they should be de-risking as they approach “full-funding”, especially this far into bull markets for both bonds and equities. Why risk the good work and financial resources that brought the plan to a sound financial position?

For those systems that are more challenged at this time a combination of factors will need to be addressed from contributions, benefit formulas, costs, asset allocation, etc. These poorly funded systems aren’t necessarily crippled, but a new path must be followed if they are to survive.

We’ve highlighted many of the challenges that these states are facing at this time from growing debt burdens to higher taxes and out-migration.  There is no magic bullet, and closing these deficits will take much more than just increasing taxes on their residents.  Ryan ALM and KCS have produced a six-step process to full-funding that is designed to work for all plans no matter what their current funded status. We’d be happy to share our thoughts with you.