Stat: $1.24 trillion: The 50-state pension funding gap—the shortfall between what all the states have funded and what they actually owed public employee retirees—as of 2018.
Story: Public employees count on pensions when they retire, but most states haven’t adequately funded their obligations. As of 2018, the funding gap for all the states totaled $1.24 trillion. Without sustainable funding, the cost of retiree benefits can mean less money is available for schools, roads, or public safety. In this episode, we hear from Greg Mennis, who leads Pew’s efforts to help states find innovative solutions to close the funding gap and save taxpayer dollars. We also speak with Marcie Frost, who leads the California Public Employees' Retirement System—the country’s largest public pension system—on how stress testing that pension fund helps policymakers understand potential costs and liabilities as they make decisions to help secure retirement benefits for 2 million public employees, retirees, and their families.
Related resources:
States Are Struggling to Fund Pensions—Here’s Why
Pennsylvania’s Historic Pension Reforms
States of Innovation: What is Budget Stress Testing?
Public Pension Investments Largely Recover After Pandemic-Related Slide