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.
Iowa is one of only 10 states with funding for at least 85% of its pension obligations. The state has a total of $34.8 billion in assets in its pension fund against a total of $40.7 billion in liabilities. At current levels, without any additional investments, Iowa’s retirement system could meet its obligations for another 15 years.
The Iowa Public Employees’ Retirement System fund reported a net return of 29.6% in fiscal 2021, exceeding its policy benchmark of 28.8%.
All pension funding data used in this story was compiled by The Pew Charitable Trusts and is for 2019. We also considered public-sector, state-level employment, both in raw numbers and as a share of overall employment, using data from the Bureau of Labor Statistics.
| Rank | State | Pension funding ratio | Pension assets ($, 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 |
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