The gap between the promises states have made for public employees' retirement benefits and the money set aside to pay for them grew to at least $1.26 trillion in fiscal year 2009—a 26 percent increase in one year—according to a Pew report.
The Widening Gap: The Great Recession's Impact on State Pension and Retiree Health Care Costs analyzes 2009 and 2010 data on states' funding of pensions and retiree health care. The report shows how states' retirement systems—many of them already on shaky ground—were affected by the Great Recession:
- Pension funding shortfalls accounted for $660 billion of the $1.26 trillion gap, and unfunded retiree health care costs accounted for the remaining $607 billion.
- States had only about $31 billion, or 5 percent, saved toward their obligations for retiree health care benefits.
- State pension plans were 78% funded, declining from 84% in 2008.
Click the image below to see an interactive map with state-specific data on funding for public sector pensions and retiree health care.
FAQs about the Widening Gap Report.