Trillion Dollar Gap A $1 trillion gap exists between the $2.3 trillion states and participating localities have set aside to pay for employees' retirement benefits and the $3.3 trillion price tag of those promises. Learn more about this trend.

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Assessment

Pension Funding Level










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About this Assessment: Pension Funding Level

About this Assessment

Percentage of States' Pension Liabilities That Are Funded

Analysis

Many experts in the field, including the U.S. Government Accountability Office, suggest that a healthy pension system is one that is at least 80 percent funded. In the aggregate, states' systems in fiscal year 2008 were 84 percent funded. This is relatively good news. However, many states are struggling. In 2008, 21 states were funded below 80 percent and overall states faced a $452 billion unfunded liability.

Methodology

This statistic measures the funding level of each state's combined pension obligations from 1997 to 2008. This number is calculated by dividing the assets set aside to pay for pension costs by the state's actuarially accrued pension obligation. The available data for some states did not extend back to 1997. 2008 data were presented for all states except Ohio, which only has made data up to 2007 available. These data and the methodology used to collect them are available in Pew’s Trillion Dollar Gap report at http://downloads.pewcenteronthestates.org/The_Trillion_Dollar_Gap_final.pdf.