Minnesota’s pension plans underfunded by $16.7 billion

Minnesota’s public pension plans for government employees are underfunded by $16.7 billion — a deficit that’s $4 billion larger than it was when lawmakers took steps to fix the problem in 2010.

The underfunded pensions aren’t a reason for alarm, experts say, but they say it is a problem that 11 of the state’s 12 public pension plans open to new members don’t have enough money coming in to cover promised benefits. Plans for state troopers, public safety workers, and local police and firefighters are among those with the largest gaps. Lawmakers will consider changes to those plans this year.

“Is there a need for concern? Yes,” said Larry Martin, executive director of Minnesota’s Legislative Commission of Pensions and Retirement. “We’re departing — significantly — from what we think we ought to be doing.”

The commission released the numbers last month. The figures are current through last June 30. The plans pay for retirement for more than 729,000 current and retired state and local government workers and pay out about $3.8 billion in benefits annually. Read more >>