(NASHVILLE, TN), June 30, 2015 – Senate Finance Committee Chairman Randy McNally (R-Oak Ridge) said today that Tennessee has the fifth best pension funded ratio in the nation. McNally made the announcement after receiving Standard and Poor’s Rating Services’ most recent report which was released last week.
Under Standard and Poor’s U.S. state rating criteria, a state’s debt and liability profile is one of five major factors that determine a rating. McNally credits strong leadership, both past and present, for the state’s high rating.
“We have a history of strong leadership in taking a very fiscally prudent path in funding our pension plan,” said Senator McNally. “I appreciate the acknowledgement by Standard and Poor’s that shows our efforts to keep our state’s pension fund well managed and Tennessee’s finances as sound as possible.”
In their report, Standard and Poor’s said, “We view pension obligations as long-term liabilities that must be funded over time and a state’s commitment to funding its contributions is a key credit consideration. Public pensions clearly are in a period of transition based on accounting and actuarial changes, funding commitments, and the recent court decisions that deemed certain states’ enacted reform efforts unconstitutional. Standard & Poor’s expects pensions to remain a significant public policy and funding challenge for many state governments, and a continuing source of expanding liabilities for most.”
“We worked very hard to keep our state on sound financial footing, even if it meant painful budgetary decisions. Like with family budgets, debt is one of the worst pitfalls in financial planning. Tennessee stands in good financial shape because those tough decisions were made.”
The report listed Tennessee fifth behind Wisconsin, South Dakota, Oregon and North Carolina as having the best ranking, while New Hampshire, Alaska, Connecticut, Kentucky and Illinois ranked were ranked the lowest in the U.S.