Public pensions took a beating during the Great Recession of 2008, and a recent report from the Equable Institute showed there to be no net recovery from those losses. The report also noted that total unfunded liabilities for statewide plans had increased from nearly $100 billion in 2001 to $1.35 trillion in 2019, with an estimated 2020 total of $1.62 trillion as a result of negative cash flows and market underperformance.
Unsurprisingly, the pandemic had something to do with that: Half of the plans that were at least 90% funded by the end of 2019 dropped to 60%-90% funded as a consequence of COVID-19. Additionally, benefits payments are increasing as more people retire, contributing to the negative cash flow, which as of 2019 amounted to $113 billion.
A new study from GOBankingRates.com examines which states in the nation are better positioned to continue funding their pensions—and which ones might see rougher waters ahead.
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Richard Binder
Richard Binder, based in New York, is part of the social media team at ALM. He is also a 2014 recipient of the ASPBE Award for Excellence in the Humorous/Fun Department.
