A decade of increasing pension contributions and the strong stock market rally of 2021 have combined to help stabilize state pension funds. As a result, pension plan assets have risen by more than half a trillion dollars since 2011, leading to a 50-state funded ratio—the share of pension liabilities backed by plan assets—of more than 80%, the highest since the 2008-09 recession. And total unfunded state pension obligations were less than $800 billion at the end of fiscal year 2021, the greatest progress in closing the state pension plan funding gap—the difference between plan liabilities and assets—this century.
However, not all state pension funds are approaching long-term fiscal sustainability, defined as government revenue matching expenditures without a corresponding increase in public debt. As part of a larger project to develop a fiscal sustainability matrix highlighting the practices of successful state pension systems and presenting critical 50-state data that facilitates comparative analyses and plan assessments, The Pew Charitable Trusts is producing individual state fact sheets. The data points in these fact sheets include historical outcomes from policy choices, measures of cash flow that determine long-term solvency, and indicators of risk and uncertainty.
Alaska | Arizona | California | Colorado | |||
Connecticut | Hawaii |
Idaho |
Kentucky | |||
Montana | Nevada |
New Jersey | New Mexico | |||
Oregon | Pennsylvania | Tennessee | Utah | |||
Washington |
Wisconsin | Wyoming |
Although no one metric can tell the whole story, together these measures offer a comprehensive view of state pension funds’ fiscal sustainability: