Study: States $1T behind in funding employee pensions

A new study warns that most states, including Minnesota, have fallen far behind in funding retirement benefits for public employees.

The Pew Center on the States says there's now a $1 trillion gap between what states have set aside for pensions and health benefits, and the price tag for those promises.

The study lists Minnesota with 14 other states in the "needs improvement" category for pensions, with an unfunded liability of $10.7 billion at the end of fiscal year 2008. The Pew Center's Susan Urahn says more troubling is Minnesota's $1 billion liability for health care and other benefits.

"With the cost of health care escalating, with baby boomers retiring, that pay as you go approach may prove to be more challenging over time," she said.

Urahn says the center is recommending states cut unfunded liabilities by reducing benefits and sharing costs with employees.

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