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Government & Politics

Ohio's Pension Systems Are Underfunded, According to a New Report

photo of David Draine

State pension systems are underfunded by more than a trillion dollars nationwide, according to a new report. And taxpayers would have to make up that shortfall. But Statehouse correspondent Karen Kasler reports the study has some good news for Ohio.

Ohio’s pension system is 76 percent funded, which is an improvement over the last time the Pew Charitable Trusts looked at public sector retirement systems. Senior researcher David Draine says Ohio is at 21st in the nation, and he notes the state has made some changes to try to shore up its pension funds, such as capping cost-of-living adjustments.

“If all those things hold true, that obviously puts them on a path towards closing their pension debt over time.”

But the report said the three Ohio pension funds studied assumed rates of return of more than 7.75 percent, which is twice as high as their actual rates of return. And the Pew study said pension funds nationwide paid more than $4 billion in hidden fees, mostly to private equity managers.