Every State’s Pension Crisis Ranked

Every State’s Pension Crisis Ranked

September 21, 2021

In much of the country, public pension funding has been one of the most persistent public policy problems. For years, state governments have failed to make necessary investments in their retirement system, resulting in funding gaps that increasingly present a looming reckoning for taxpayers. 

According to a recent report published by The Pew Charitable Trusts, a public policy think tank, many states are now taking earnest measures to reduce their pension funding gap. These measures include increased contributions, cost reduction strategies, and more sophisticated pension management tools. States have also benefited from once-in-a-generation investment returns following the COVID-19 market crash in March 2020. 

Still, based on 2019 data, the most recent year of available comprehensive data, only two states in the country have funding for 100% of their pension obligations. Meanwhile, just over half of all states have a funding shortfall of 25% or more.

Using pension funding data from The Pew Charitable Trusts, 24/7 Wall St. ranked the pension crisis in each state.

In contrast to 401(k) retirement plans, which have largely supplanted pensions in the private sector, pensions promise a specified monthly income to retirees for the rest of their life. Under this system, the burden of risk falls on the employer. Public sector workers, such as firefighters, police officers, and teachers, account for a considerable share of the workforce in parts of the country — and for many of them, pensions are critical to financial security throughout retirement. Here is a look at the states that pay teachers the least.

Click here to see every state’s pension crisis ranked
Click here to read our detailed methodology

Source: Read Full Article