Healthy pension plans have 100% funding
This is in regards to your editorial, "State cannot ignore pension problems," (Dec. 26). There was a comment that 80 percent funding was healthy for a public pension plan. This is not the case.
This is from the American Academy of Actuaries: http://www.actuary.org/files/Pension%20Funding.pdf
The beginning: "The health of defined-benefit pension plans is a key issue to the tens of millions of Americans who are receiving or expecting to collect pension benefits. Some have said that the level of funding - specifically an 80 percent funded level - should be used as a general benchmark to determine whether pension plans are financially healthy. In reality, however, no single level of funding distinguishes a healthy plan from an unhealthy plan. In fact, plans should have as their objective accumulating assets equal to 100 percent of relevant pension obligations."
Of course, the Connecticut pension situation is even worse. But 80 percent is far from healthy.
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