Unfunded Pension Liabilities Have Increased by More Than $900 Billion

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According to a report by the American Legislative Exchange Council (ALEC), unfunded state pension liabilities in the U.S. total $5.82 trillion

According to a report by the American Legislative Exchange Council (ALEC), unfunded state pension liabilities in the United States total $5.82 trillion, equivalent to more than $17,000 for every person in the United States. This represents a $900 billion increase from the council’s last year report.

The document surveyed more than 290 state-administered public pension plans, listing assets and liabilities within the 2011-2019 period.

In the report, ALEC asserts that the cumulative growth of pension payments is putting enormous pressure on state governments, which have to relocate revenue that otherwise should be destined to essential services like public safety and education or tax relief.

Contract and state constitutional laws order state governments to make these pension payments regardless of economic conditions.

ALEC’s study has also found that the 10 states with the biggest unfunded liabilities have grown rapidly, hence increasing their share of total unfunded liabilities in the United States.

These means that California, Illinois, Texas, Ohio, New York, New Jersey, Pennsylvania, Florida, Georgia and Massachusetts, “make up 58 percent of all unfunded liabilities in the country, up from 57 percent last year. Pension investment returns have again fallen short of assumptions in this year’s report, covering FY 2019, with an average of 6.5 percent return instead of the assumed 7.2 percent.” – READ MORE

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