New Jersey’s gaping public-worker pension hole continued to improve slightly last year, even as the state contributed billions of dollars less than recommended by pension actuaries.

The system’s unfunded liabilities dropped by nearly $12 billion to $130.7 billion. The ratio of assets to liabilities increased nearly three percentage points to 38.4 percent in the fiscal year that ended June 30, according to the state’s latest financial statements.

“This is a step in the right direction as a result of staying true to our commitment to increase pension contributions,” said state Treasury Department spokeswoman Jennifer Sciortino.

But while having the pension system 38.4 percent funded is an improvement, there’s still a long way to go, as it remains among the worst-funded among states.

The new numbers represent one methodology for calculating the health of the pension system for state and local government workers in compliance with national accounting rules for reporting financial assets and liabilities.

New Jersey bases its own calculations on more optimistic long-term investment returns. The state’s pension system looks much weaker under these national accounting standards, which matter to Wall Street rating agencies.

Measured this way, the public pension system had $81.5 billion in assets and $212.2 billion in liabilities, as of July 1. That leaves a $130.7 billion unfunded liability — a daunting funding gap the state will grapple with for decades to come.

The new numbers do not distinguish between the pension systems for state workers and local government workers. Local governments are not allowed to take a break from their pension contributions, and their pension systems are better funded than the one partly funded by the state. That’s because governors and lawmakers from both political parties for years contributed less than what was needed to keep the state pension system healthy — including years they chipped in nothing at all.

The financial disclosure does, however, show improvement over the previous year.

S&P Global said in 2017, when the funded ratio fell to just 31 percent, that it believed the state’s pension woes had bottomed out — “absent a recession” — because of the state’s commitment to increase its contribution.

The state kicked in 50 percent of what’s recommended, or $2.5 billion, last year, and the fund returned 9.06 percent on its investments, beating the 7.50 percent long-term assumed rate of return. It is contributing 60 percent, or $3.2 billion, this year, and Gov. Phil Murphy’s proposed state budget includes a 70 percent, or $3.8 billion contribution.

The unfunded liabilities are expected to continue falling if the state keeps on that funding path. Still, the pension system remains one of the worst funded in the country.

Murphy has hired a financial adviser to help evaluate which state-owned assets, if any, can be sold, leased or otherwise leveraged to help fund the pension system.

But state Senate President Stephen Sweeney, D-Gloucester, has called for pension reforms, including revising retirement benefits for new employees and those with fewer than five years of service.

Samantha Marcus may be reached at smarcus@njadvancemedia.com. Follow her on Twitter@samanthamarcus. Find NJ.com Politics on Facebook.

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