Morningstar, the investment research firm, has published a new study, “The State of State Pension Plans,” that delves into the dangerously underfunded condition of many state pension plans. Pensions, states the report, “will play an integral role in determining a state’s fiscal health and overall credit quality, going forward.”
I keep looking for a report that shows the extent to which Virginia’s pension reforms, enacted in the 2013 General Assembly session, put the Virginia Retirement System on a firm actuarial foundation. This study is not it. But it does show how badly the VRS had deteriorated in the years leading up to that reform, as can be seen in the chart above.
For what it’s worth, Morningstar rated the condition of Virginia’s pension system as “fair” based on 2011 data. Wisconsin had the soundest pension system, Illinois the worst.