SOUTH BEND, Ind. — Indiana is more than $10 billion short of funding pensions that will be owed to retired state workers in the next three decades, a new report found.

The Pew Charitable Trust’s “Promises with a Price” report found other states in similar situations. Nationwide, states have saved enough to meet 85 percent of projected costs in pensions, health care and other retirement benefits, meaning they are short $731 billion collectively.
Indiana is $10.6 billion short of the $29 billion the state expects to need for retirees in the next 30 years, according to the report.
Report co-author Katherine Barrett said Indiana may be slightly better off financially than the report indicates, because its assumed rate of return on the $18.4 billion Indiana has invested is calculated at a relatively low 7.25 percent, compared to a national mean of 8 percent.
Indiana’s employee retirement fund would be in better shape, the report said, if the state did not have an underfunded teacher pension system. The study found that Indiana’s teacher pension plan only was funded at 44 percent in 2006, the most recent figure available.
“That’s really, really low,” Barrett said.
Indiana is trying to catch up, Barrett said, noting that Indiana funded its teacher pension plan at $701 million in 2006 — above the $672 million needed — and funding pension contributions at $955 million, instead of the $947 million needed.

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