States Are Struggling to Fund Pensions—Here’s Why

Описание: Today taxpayers are paying nearly twice as much to fund pensions as they did 10 years ago.

But on average, state pensions are only 71 percent funded—amounting to more than $1 trillion dollars in debt. The bill for this debt has crowded out public spending on schools, roads, and public safety.

How did we get here? Our video explains in less than two minutes.

To learn more about the state pension funding gap, visit https://www.pewtrusts.org/en/projects....

FULL TRANSCRIPT:
Millions of our state and local workers such as teachers, first responders, and other public employees receive pensions as part of their compensation—and they are counting on this income for their retirement. In 2000, most state pensions were fully funded. But many state pensions face challenges. Today, only 3 out of 50 states have at least 95 percent of the assets needed to fund their pensions. And on average, state pensions are only 71 percent funded—amounting to more than $1 trillion dollars in debt. How did we get here? During the dot-com crash and Great Recession, pension fund investments took significant hits. At the same time, state revenues dropped and many states fell short of setting aside enough money to make up the difference. Today, taxpayers are paying nearly twice as much to fund pensions as they did 10 years ago—and many states are still unable to close the gap. It’s not just the workers counting on a pension who need to pay attention to this. Without proper funding, the gap will continue to grow and could ultimately displace other essential services like roads, schools, and public safety. But it’s not too late. Pew works with states and cities to help find solutions. Because there is no one-size-fits-all approach, we provide research and technical assistance to states to help policymakers decide what works best—putting employees on the path to a secure retirement and easing the burden for future generations.