Connecticut Unfunded Pension Liabilities Miscalculated, Report Says.

Chief Investment Officer reports:

Connecticut officials are underestimating the state’s pension liabilities by more than 50%, according to a report from Stanford University’s Hoover Institution.

The report, “Hidden Debts, Hidden Deficits: How Pension Problems Are Consuming State and Local Budgets” compares government measurements of pension costs and obligations to market valuations, concluding that the near $30 billion in 2015 pension liabilities is actually closer to $70 billion—more than twice the reported amount.

The reason for this dramatic miscalculation is unrealistic return expectations, which are used by government officials to calculate unfunded liabilities, the report said.

Mistakes were made.