Two of Ohio’s five public pension systems recently released their 2011 Comprehensive Annual Financial Reports (CAFR).  While they’re a dull read for most, CAFRs do provide a useful snapshot of overall pension health.  After reviewing the State Teachers Retirement System (STRS) and the School Employees Retirement System’s (SERS) latest reports, the diagnosis for Ohio’s pension funds is even worse.

Ohio’s pension problems are well documented.  Here are a few of the basics:

• $66 billion in unfunded liabilities
• Only 67 cents of assets for every one dollar of liabilities
• $5,726 owed by every Ohioan to close the unfunded liabilities gap
• Three of Ohio’s five plans will never be able to pay off their liabilities under current law

The new STRS and SERS numbers are not promising.  Unfunded liabilities for STRS grew from $38.7 billion in 2010 to nearly $40.7 billion in 2011.  The same is true for SERS: unfunded liabilities from 2010 to 2011 grew from $4.1 billion to $5.5 billion, respectively.

What this means is that the $66 billion hole we are in currently is likely even deeper than we anticipated.  We’ll have to wait until the remaining funds release their 2011 data to fully grasp the depth of the problem.

The current path is unsustainable.  Ohio lawmakers have two choices for reform.  One, make minor changes to the existing systems—a strategy which has contributed to the current situation—or two, embrace forward thinking reforms that include defined-contribution solutions, like those documented in our report, Hanging By a Thread.

Public pension reform is an issue of critical fiscal importance.  Ohioans deserve a system that provides fair benefit levels to its retirees at a reasonable cost to taxpayers. With the new data showing a crisis that is worsening by the day, it is imperative that Ohio lawmakers reach for bold solutions, not another temporary fix to a long-running problem.