Project

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. 

bridge
bridge
Issue Brief

State Pension Plans Have Stabilized in Wake of Pandemic

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Issue Brief

The nation’s state retirement systems finished the 2021 fiscal year in their best condition since the Great Recession of 2007-09. According to projections by The Pew Charitable Trusts, the gap between the cost of pension benefits that states have promised their workers and what they have set aside to pay for them dropped in 2021 to its lowest level in more than a decade. Pew estimates that state retirement systems are now over 80% funded for the first time since 2008.

Arrows are seen embedded in a target during practice for the women's individual eliminations match on August 17, 2004 during the Athens 2004 Summer Olympic Games at Panathinaiko Stadium in Athens, Greece.
Arrows are seen embedded in a target during practice for the women's individual eliminations match on August 17, 2004 during the Athens 2004 Summer Olympic Games at Panathinaiko Stadium in Athens, Greece.
Issue Brief

Pew's Fiscal Sustainability Matrix Assess Pension Health

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Issue Brief

The combined effect of a decade of increasing pension contributions and the strong market rally of 2021 has had a stabilizing effect on state pension plans. Taken together, these factors contributed over half a trillion dollars to current plan assets.

Vermont State House
Vermont State House
Article

Vermont Strengthens Governance of State Pensions

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Article

Vermont lawmakers have taken significant steps this year to boost the independence of the commission that manages the state’s public pension investments and strengthen its governance.

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houses
Fact Sheet

Municipal Pension Funding Increased in Recent Years, but Challenges Remain

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Fact Sheet

Municipal Pension Funding Increased in Recent Years, but Challenges Remain

The Pew Charitable Trusts has examined funding data for 100 pension plans in 33 cities from 2015 to 2017. The analysis found a $145 billion shortfall in 2017 between assets on hand and the liabilities for promised benefits, representing an aggregate funded ratio of 68%, only slightly below the overall state pension plan funded ratio of 69%.

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.