Special Report
How Colorado's Pension Shortfall Compares to Other States
Published:
Last Updated:
In much of the country, public pension funding has been one of the most persistent public policy problems. For years, many state governments have failed to make necessary investments in their retirement system, resulting in funding gaps that increasingly present a looming reckoning for taxpayers.
According to a recent report published by The Pew Charitable Trusts, a public policy think tank, many states are now taking earnest measures to reduce their pension funding gap. These measures include increased contributions, cost reduction strategies, and more sophisticated pension management tools. States have also benefited from once-in-a-generation investment returns following the COVID-19 market crash in March 2020.
Still, based on 2019 data, the most recent year of available comprehensive data, the majority of states have a funding shortfall of 25% or more.
Colorado’s public employee pension system is underfunded to a greater degree than most other states. Pension liabilities in the state total $77.9 billion — yet at $51.8 billion, pension assets cover only about two-thirds of total obligations.
A recent audit of Colorado’s retirement system revealed biases in assumptions related to cash flow. Among them are underestimating the effect of employee withdrawal on liabilities and underestimating the pension costs of new entrants to the system. These resulted in the understating obligations to tune of about $500 million per year. Colorado lawmakers will work to address these and other issues to have a fully funded retirement system by the target date of 2048.
All pension funding data used in this story was compiled by The Pew Charitable Trusts and is for 2019. We also considered public-sector, state-level employment, both in raw numbers and as a share of overall employment, using data from the Bureau of Labor Statistics.
Rank | State | Pension funding ratio | Pension assets ($, billions) | Pension liabilities ($, billions) | State government employees |
---|---|---|---|---|---|
1 | Wisconsin | 103.0% | 112.1 | 108.9 | 89,800 |
2 | South Dakota | 100.1% | 12.5 | 12.5 | 17,300 |
3 | Tennessee | 98.2% | 41.1 | 41.8 | 95,500 |
4 | Washington | 96.3% | 100.9 | 104.8 | 142,700 |
5 | New York | 96.1% | 215.2 | 223.9 | 254,600 |
6 | Idaho | 94.6% | 17.7 | 18.8 | 30,100 |
7 | Nebraska | 93.1% | 15.2 | 16.3 | 42,500 |
8 | Utah | 91.7% | 35.2 | 38.4 | 81,200 |
9 | North Carolina | 88.4% | 101.4 | 114.6 | 196,100 |
10 | Iowa | 85.4% | 34.8 | 40.7 | 67,100 |
11 | Maine | 84.3% | 15.1 | 17.9 | 24,600 |
12 | Delaware | 83.4% | 10.2 | 12.2 | 32,200 |
13 | West Virginia | 83.4% | 15.9 | 19.1 | 46,900 |
14 | Minnesota | 82.2% | 70.8 | 86.1 | 98,900 |
15 | Oklahoma | 80.7% | 33.2 | 41.1 | 79,700 |
16 | Oregon | 80.2% | 70.2 | 87.5 | 41,300 |
17 | Arkansas | 80.0% | 28.6 | 35.7 | 76,200 |
18 | Ohio | 80.0% | 168.4 | 210.5 | 168,000 |
19 | Georgia | 78.7% | 95.6 | 121.6 | 162,500 |
20 | Florida | 78.2% | 163.9 | 209.5 | 246,400 |
21 | Missouri | 77.8% | 59.9 | 77.0 | 100,200 |
22 | Virginia | 77.2% | 79.8 | 103.3 | 157,300 |
23 | Nevada | 76.5% | 44.3 | 57.9 | 40,200 |
24 | Wyoming | 76.5% | 9.0 | 11.8 | 13,600 |
25 | Montana | 72.5% | 11.9 | 16.4 | 27,400 |
26 | California | 71.9% | 474.3 | 659.4 | 521,600 |
27 | Maryland | 71.6% | 54.3 | 75.8 | 108,100 |
28 | Kansas | 69.9% | 20.6 | 29.5 | 50,700 |
29 | North Dakota | 69.8% | 5.9 | 8.4 | 21,400 |
30 | Alabama | 69.4% | 38.5 | 55.5 | 117,000 |
31 | Texas | 69.0% | 186.8 | 270.7 | 426,400 |
32 | Indiana | 68.6% | 30.8 | 44.9 | 108,900 |
33 | Alaska | 67.4% | 15.2 | 22.6 | 22,500 |
34 | New Mexico | 67.3% | 29.2 | 43.4 | 53,700 |
35 | Louisiana | 66.9% | 36.8 | 54.9 | 86,800 |
36 | Colorado | 66.5% | 51.8 | 77.9 | 126,600 |
37 | New Hampshire | 65.5% | 9.2 | 14.1 | 22,400 |
38 | Arizona | 65.2% | 49.9 | 76.6 | 89,800 |
39 | Vermont | 63.7% | 4.5 | 7.1 | 17,800 |
40 | Mississippi | 61.7% | 28.6 | 46.4 | 57,400 |
41 | Michigan | 61.1% | 65.0 | 106.4 | 178,800 |
42 | Massachusetts | 59.4% | 58.3 | 98.1 | 122,600 |
43 | Pennsylvania | 58.0% | 89.8 | 154.8 | 148,600 |
44 | South Carolina | 55.4% | 32.3 | 58.3 | 103,500 |
45 | Hawaii | 54.9% | 17.2 | 31.4 | 67,000 |
46 | Rhode Island | 54.5% | 6.6 | 12.1 | 20,400 |
47 | Kentucky | 44.6% | 24.0 | 53.7 | 90,800 |
48 | Connecticut | 44.4% | 32.0 | 72.1 | 71,000 |
49 | New Jersey | 39.7% | 82.3 | 207.1 | 138,700 |
50 | Illinois | 38.9% | 92.6 | 237.9 | 147,000 |
Want retirement to come a few years earlier than you’d planned? Orare you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.