U.S. State Pension Funding Gap Up 20 Percent in 2012 – Wilshire

The recovery in the U.S. state pension system suffered a setback
in 2012 as the huge funding shortfall in a large swath of state pensions
swelled more than 20 percent, interrupting two years of improvement following
the devastation of the financial crisis. The shortfall in 109 of the nation's
state pension plans, which guarantee retirement for millions of public workers
such as police, firefighters, and teachers, rose to $834.2 billion in 2012, up
from $690.3 billion the previous year, according to a new report by Wilshire
Consulting, a unit of independent investment management firm Wilshire
Associates. The report highlights the uphill struggle faced by many of the
state pension plans nationwide and is a reminder that financially strained
state governments will have to make some tough choices in order to make up the
shortfall. It also shows state pension fund managers are continuing to up their
exposure to less conventional assets such as real estate, private equity, hedge
funds, and commodities as they try to boost their returns and diversify away
from over exposure to volatile equities.

Source/more: Reuters