State pension funds are underfunded by $4.1 trillion, a figure far higher than the states have calculated, according to a report from State Budget Solutions.
The nonprofit group, founded in 2010 to urge states to reform their budgeting processes, said it used a fair market valuation that discounts liabilities at a risk-free rate, as opposed to the “optimistic” investment returns used by most plans.
The report found state pensions funded at 39 percent in aggregate; the states claimed a 73 percent rate.
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