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Public school and college employees in New Mexico are confronting a widening gap between promised pension benefits and the money currently available to pay for their retirements, the Associated Press reported on Friday. Managers of New Mexico's retirement fund for public education employees have acknowledged an $800 million increase in needs, after they lowered expectations for future investment returns. The New Mexico Educational Retirement Board that oversees $12 billion in retirement assets is following in the footsteps of public pension funds across the country by lowering expectations for future earnings on investments — acknowledging that more money will likely be needed to pay people as they retire. The new outlook shows $7.4 billion in unfunded liabilities — the difference between promised pension benefits and the assets currently on hand to pay them. 

Public schoolteachers and other education workers in Connecticut should soon have an easier time figuring out how much they are paying for their retirement investments, the New York Times reported today. These costs should not be a mystery, yet they are often difficult to find and even more challenging to understand, particularly for employees in public schools. These workers are commonly sold expensive and complex investments inside their 403(b) plans, which are retirement accounts offered to educators, nonprofit employees and many hospital workers. Most of these plans leave employees more vulnerable because they are more lightly regulated than their better-known counterparts, 401(k) accounts. A bill passed by the Connecticut Legislature tries to improve this situation by requiring all 403(b) retirement plan providers to disclose fees and compensation to state and municipal workers. The legislation, which unanimously passed in the state Senate last week, is headed to Gov. Dannel P. Malloy for his signature.

New Jersey Gov. Chris Christie (R)is betting that the lottery is the ticket to shoring up one of the state’s most vexing money problems: ever-growing obligations to the pensions for public employees, the Associated Press reported. The idea of linking the lottery to pensions has been around for years, but legislation backed by the Republican governor was introduced this week to make the lottery the property of the pension system for 30 years. Analysts and advocates say that the deal — an arrangement that would be unique to New Jersey — probably won’t hurt, but there’s not a consensus on how much it might help. Since Christie took office in 2010, the state has contributed more than $6 billion to retirement funds to which past governors have often skimped on payments — or skipped them entirely. Still, the gap between the money expected to be in the funds and that which is owed to retirees has only grown. By any measure, it’s among the biggest unfunded pension liabilities in the country.

Pennsylvania Gov. Tom Wolf (D) signed a pension-overhaul bill on Monday that the nonpartisan Pew Charitable Trusts says will be one of the most comprehensive state-level reforms in the U.S., the Wall Street Journal reported today. The compromise measure will move most future state and public school workers at least partly into 401(k)-style plans to help shore up the deeply underfunded pension system and shift market risk from taxpayers to employees. An independent analysis estimates the state will save $5 billion to $20 billion over 30 years, depending on investment performance. Pennsylvania is one of many states, including New Jersey, Illinois and Connecticut, grappling with rising pension costs and huge unfunded liabilities — the gap between promised benefits and the funding available to meet those obligations. A 2015 Pew report found that the nation’s state-run retirement systems had a collective $968 billion shortfall.

When President Donald Trump took office, many in the financial industry were confident that a looming retirement-savings rule they had opposed for years would soon be dead. To their dismay, the core principle of the rule was implemented today, the Wall Street Journal reported. The resilience of the “fiduciary rule” is partly attributable to delays in appointing senior officials at the Labor Department, the rule’s creator, who would be capable of unwinding a major regulation so close to its implementation, according to industry representatives and consumer advocates involved in the process. Labor Secretary Alexander Acosta didn’t take up his post until late April, after Trump’s first pick for the role withdrew from consideration. Other top positions at the Labor Department remain vacant, leaving career officials—who had helped to write the original rule — to shepherd a review of the rule that the president requested in February. Aversion toward the risk of litigation from consumer groups has also made the administration reluctant to delay the rule long enough to allow for an overhaul or kill it altogether, industry representatives and consumer advocates say.

Religious hospitals don't have to comply with federal laws protecting pension plans, a unanimous Supreme Court ruled on Monday in a case that affects retirement benefits for roughly a million workers nationwide, the Associated Press reported. The justices sided with three church-affiliated nonprofit hospital systems being sued for underfunding their employee pension plans. The hospitals — two with Catholic affiliation and one with Lutheran ties — had argued that their pensions are "church plans" that are exempt from the law and have been treated as such for decades by federal officials. Workers asserted that Congress never meant to exempt massive hospital systems that employ tens of thousands of workers. They said the hospitals are dodging legal safeguards that could jeopardize their benefits. Writing for the court, Justice Elena Kagan said that a pension plan operated by a religiously affiliated hospital is exempt from the law "regardless of who established it."