Pension burden grows for states

The health of public pension systems has declined sharply since 2000.

In 2006, the most recent period with comparable data, the average state reported pension assets of $8.10 for every $10 in expected liabilities.

Six years earlier, the average state pension fund had more assets than expected liabilities.

According to Standard & Poor's, recent market volatility could destabilize these funds.

Managers of state pension funds assume they can grow their assets each year through investments. When they can't, their funding ratios can fall, increasing the risk the plans won't be able to pay the pensions of public employees and teachers.

The world's stock markets lost $5.2 trillion in January alone.

"If January sets the pace for 2008, investment returns will be a significant challenge to sustained improvement in funded ratios," S&P analysts wrote.

West Virginia and Rhode Island have the lowest ratios of assets to expected liabilities.

Of the 10 states with the worst funding ratios, the largest unfunded liabilities are Illinois ($32.4 billion) and Connecticut ($14.8 billion).