[credit provider=”Courtesy of WPRI” url=”http://blogs.wpri.com/2011/04/13/ris-unfunded-pension-liability-soars-by-nearly-2b/”]
Rhode Island’s unfunded pension liability is almost $2 billion higher than previously estimated, according to a new report from the state retirement board.The state’s unfunded obligation is now $6.8 billion, up from $4.9 billion, WPRI reports. That puts the state’s pension funding ratio at 48%, the worst in the nation, according to data from Boston College’s centre for Retirement Research.
The 39% jump is based on a new set of assumptions about the state of Rhode Island’s public pensions systems, approved today by the Employees’ Retirement System of Rhode Island. The changes include lowering the expected rate of return from 8.35% to 7.5%, decreasing the rate of inflation from 3% to 2.75% and increasing the life expectancy of retirees.
The revised assumptions come amid an SEC investigation into Rhode Island’s bond offerings, sparked by questions over whether the state adequately disclosed its pension liabilities.
As a result of the new numbers, taxpayer contributions to the pension system are expected to swell dramatically, from $233 million this year to about $397 million in 2012-13. The revised pension estimates also put further pressure on Rhode Island’s budget, which currently faces a $331 million shortfall.