Press Release

Stagflation Threatens 401K Retirement Savings, Unfunded State Pension Liabilities Threaten Taxpayers

Taxpayers on the hook for unfunded pension liabilities exceeding $8.2 trillion across the 50 states

Contact: Catherine Mortensen, 703.478.4643,


ARLINGTON, VA – (June 9, 2022) Today, the American Legislative Exchange Council (ALEC) releases Unaccountable and Unaffordable, 6th Edition. This annual publication from the ALEC Center for State Fiscal Reform collects and analyzes each state’s unfunded public pension liabilities. The report finds state governments’ unfunded liabilities total $8.28 trillion nationwide – an average of $25,168.26 per person.

This comparative analysis of state pension systems is a valuable tool for state legislators as they strive to keep promises made to retired public employees while also protecting taxpayers through responsible pension reforms.

“As workers in the private sector watch Bidenflation drive down the value of their 401K retirement accounts, poorly managed state pension funds in the public sector threaten to leave taxpayers on the hook for trillions of dollars in unfunded liabilities,” said ALEC CEO Lisa B. Nelson. “This report does more than simply raise alarms; it offers a roadmap for states to set their fiscal house in order.”

Unaccountable and Unaffordable, 6th Edition uses unfunded pension liabilities per capita to illustrate the magnitude of the liabilities:

States With the Lowest Unfunded Pension Liability (per capita)

1. Tennessee: $8,511

2. Indiana: $10,188

3. Nebraska: $13,370

4.Florida: $14,062

5. Idaho: $15,918

States with the Highest Unfunded Pension Liability (per capita)

46. New Jersey: $39,849

47. Hawaii: $39,939

48. Connecticut: $40,427

49. Illinois: $41,656

50. Alaska: $42,829


Click here to read the full report.

“When states over promise and under deliver on pensions, it represents a massive risk for state taxpayers, as well as state workers and retirees,” said ALEC Chief Economist and Executive Vice President of Policy Jonathan Williams. Among the most effective reforms a state can make is to move to a defined contribution plan, the gold standard for state pensions. Absent significant reforms, taxpayers in big spending states will be forced to bail out these pensions at great personal expense.”

“A growing threat to the solvency of state pension funds is politically motivated investment schemes,” added Williams. “These strategies reduce investment returns over the long term, which leads to underfunding in state pension plans across the country with taxpayers ultimately footing the bill for the shortfalls.”

“Every state pensioner should have confidence that their retirement funds are being invested for maximum growth and not to promote a political agenda,” said ALEC Vice President of Policy Lee Schalk. “To ensure promises to workers and retirees are honored and hardworking taxpayers are protected, states lawmakers should examine the new ALEC model State Government Employee Retirement Protection Act.”

The ALEC Center for State Fiscal Reform strives to educate decision makers and the general public on the principles of sound fiscal policy and the evidence that supports those principles. This is done by personalized research, policy briefings in the states and by releasing nonpartisan policy publications for distribution.


The American Legislative Exchange Council is the largest nonpartisan, voluntary membership organization of state legislators in the United States. The Council is governed by state legislators who comprise the Board of Directors and is advised by the Private Enterprise Advisory Council, a group of private, foundation and think tank members. For more information about the American Legislative Exchange Council, please visit:




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