The Trillion Dollar Gap: Arkansas

Underfunded State Retirement Systems and the Roads to Reform

The Trillion Dollar Gap: Arkansas

Arkansas is managing its long-term pension liability well, but it needs to improve how it handles the bill coming due for its retiree health care and other benefits. Since 1997, Arkansas has consistently surpassed actuarially required contribution levels, and it has funded more than 87 percent of its total pension bill, surpassing the 80 percent benchmark that the U.S. Government Accountability Office says is preferred by experts. The current funding level represents a positive jump from 2005, when Arkansas was less than 82 percent funded. In 2009, the state merged the assets of the State Police Retirement System with the larger and better funded Public Employees' Retirement System, allowing the larger plan to handle investing the State Police plan's assets. Outside of pensions, Arkansas—like 19 other states—has failed to set aside any assets to cover its $1.8 billion bill coming due for health care and other benefits.