Unfunded state pension liabilities total $6.96 trillion or just under $21,000 for every man, woman, and child in the United States. As noted in this report last year, the total number of unfunded liabilities is heavily determined by U.S. Treasury note yields, which have fluctuated since 2020. State governments are obligated, often by contract and state constitutional law, to make these pension payments regardless of economic conditions. As pension payments continue to grow, revenue that could have gone towards tax relief or essential services – like public safety and education – is spent paying off liabilities instead.
Because of the significant impact unfunded pension liabilities have on state budgets and individual taxpayers, the American Legislative Exchange Council (ALEC) produces this publication to educate policymakers and the public about the dangers unfunded pension liabilities pose to core government services, the economy, and, ultimately, the taxpayer. Unaccountable and Unaffordable surveys more than 290 state-administered public pension plans, detailing assets and liabilities from FY 2012-2021.