Study: State pension shortfalls reach $4.1 trillion

Patrick Howley Political Reporter
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America’s state-level public employee pensions are underfunded by $4.1 trillion, according to a study released Tuesday by the organization State Budget Solutions.

State public pensions in the United States are only 39 percent funded, according to the study.

Illinois is facing the worst pension crisis in the country, with pensions in the state only 24 percent funded, and with an unfunded liability of more than $287 billion (more than $22,000 per person) against less than $92 billion in actuarial assets. Pensions in Connecticut, Kentucky and Kansas are also less than 30 percent funded, according to the study.

California, which sees its pensions 42 percent funded, faces the biggest unfunded liability at more than $640 billion.

Wisconsin, led by Republican Gov. Scott Walker, is in the best shape of any state, with its pensions 57 percent funded. Walker famously abolished collective bargaining rights in his state to help solve a multi-billion dollar budget deficit, and then won a 2012 recall election forced upon him by outraged union interests.

Aside from the Badger State, only North Carolina, South Dakota and Tennessee have their pensions at least 50 percent funded.

Pension shortfalls are currently dominating the local news cycle in Detroit, where emergency manager Kevyn Orr is pointing to the city’s severely unfunded pensions as justification for his recent decision to file for bankruptcy on behalf of the city. Public employee unions have protested against likely pension cuts.

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