Dispersion of Funding Ratios for Public Pension Plans

April 20, 2011 | Greg Leonberger, FSA, EA, MAAA, FCA, Partner, Director of Research

For all the bad press about the state of public pension plans, the chart above shows that not every state’s pension system is poorly funded. In aggregate, public pensions are approximately 75% funded (down from a high of 103% in 2000), but there is a great degree of dispersion of funding ratios on a state by state basis. Certainly, there are problem states, as shown by the bar on the left, with 11% (as a percentage of total public plan assets) funded at less than 60%. On the other hand, an almost equal percentage is fully funded, thus showing that not every state’s pension system is in need of massive contributions.