Project

Public Sector Retirement Systems

Public Sector Retirement Systems
Although taxpayer contributions to state pension plans have nearly doubled as a share of state revenue over the past decade, the plans still face a more than $1 trillion shortfall. If these benefits aren’t sustainably funded, the cost of paying for them could hinder states’ ability to fund core government services such as schools, public safety, and infrastructure.

Policymakers need better information—including successful models—to help develop financially sound retirement systems that protect taxpayers, maintain the government’s ability to deliver important public services, and put state and local workers on the path to a secure retirement.  

But there’s no one-size-fits-all solution. Every city and state has a unique set of policy preferences and budgetary challenges, and will choose its own approach. Pew provides the nonpartisan, evidence-based data and analysis that policymakers need to ensure that public sector retirement systems are financially sound for current and future workers, retirees, and taxpayers. 

Coin stack
Coin stack
Issue Brief

The State Pension Funding Gap: 2017

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Issue Brief

After nine years of revenue growth and strong investment performance, the pension funding gap—the difference between a retirement system’s assets and its liabilities—for all 50 states remains more than $1 trillion, and the disparity between well-funded public pension systems and those that are fiscally strained has never been greater.

Video

States Are Struggling to Fund Pensions—Here’s Why

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Video

Today taxpayers are paying nearly twice as much to fund pensions as they did 10 years ago. But on average, state pensions are only 71 percent funded—amounting to more than $1 trillion dollars in debt. The bill for this debt has crowded out public spending on schools, roads, and public safety.

Connecticut
Connecticut
Article

Stress Testing in Connecticut Shows Reforms Stabilizing State Pension System

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Article

Stress Testing in Connecticut Shows Reforms Stabilizing State Pension System

Connecticut has taken critical steps in recent years to stabilize its underfunded pension systems for public employees, but state officials are rightfully concerned about whether those actions will be sufficient when the next recession hits. That’s why lawmakers passed a measure in 2017 requiring annual “stress tests” of the State Employees Retirement System (SERS) and the Teachers’ Retirement System (TRS).

Hawaii State House
Hawaii State House
Article

Hawaii’s Pension Fund Positioned to Withstand Next Recession

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Article

Like many states, Hawaii has faced challenges in recent years setting aside enough money to fulfill pension promises made to its public employees. In 2017, the state reported $15.7 billion in assets to cover $28.6 billion in liabilities, just over half the amount needed. That was a stark contrast from 2000, when the retirement system was 94 percent funded.

Our Work

Data Visualization

State Retirement Fiscal Health and Funding Discipline

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Data Visualization

The funding gap between state pension system assets and benefits promised to workers reached $1.4 trillion in 2016. Underfunded public pension systems have become a significant fiscal challenge facing states and municipalities. Although some plans for public workers are well-funded, others failed to set aside enough money to fund the pension promises made to public employees and took on risks that they weren’t able to manage.