Unfunded Liabilities in State Pension Plans Total Nearly $5 Trillion, Threatening Taxpayers Nationwide
FOR IMMEDIATE RELEASE
Contact: Alexis Jarrett
Unfunded Liabilities in State Pension Plans Total Nearly $5 Trillion,
Threatening Taxpayers Nationwide
Public servants like teachers, firefighters and police officers include those at risk
ARLINGTON, VA – (June 4, 2020) Today, the American Legislative Exchange Council (ALEC) released Unaccountable and Unaffordable, the latest publication collecting and analyzing each state’s unfunded pension liabilities, which total nearly $5 trillion. The report was produced by ALEC’s Center for State Fiscal Reform, which provides policymakers with original research and expert testimony in the areas of tax, budget and pension reform.
Follow this link to read the full report.
This publication uses unfunded pension liabilities per capita to illustrate the magnitude of the liabilities:
Lowest Unfunded Liabilities (per capita)
1. Tennessee: $5,454
2. Indiana: $6,777
3. Wisconsin: $7,346
Highest Unfunded Liabilities (per capita)
48. Connecticut: $26, 553
49. Illinois: $28,220
50. Alaska: $39,949
This edition of Unaccountable and Unaffordable shows that pension underfunding existed long before COVID-19 caused major losses in public pension investments. The report reveals that, at the height of the bull market and some of the best economic growth in history, unfunded pension liabilities totaled nearly $5 trillion.
“As our report illustrates, state and local governments were struggling with massive unfunded pension obligations, even before recent market turmoil,” said ALEC Chief Economist and Executive Vice President of Policy, Jonathan Williams. “One straightforward measure that is gaining momentum with many state policymakers is to offer new employees with investment options that move towards the tax advantaged ‘defined contribution’ model. These 401k-style plans, which have been a massive wealth creator for so many private sector workers, give workers flexibility and ownership over their investments, while guaranteeing that promises made by elected officials are promises kept. Fortunately, states like Utah, Michigan and Oklahoma have all enacted comprehensive pension reforms in recent years that will protect workers, retirees and taxpayers alike.”
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: www.alec.org.