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.
With $15.1 billion in assets against $17.9 billion in pension obligations, Maine's 84.3% funding ratio is the second highest in the Northeast, trailing only New York, and 11th highest among all states.
Some 30.5% of Maine's pension assets -- the largest share -- are invested in public equity and less than half a percent is in cash. However, investment returns were lower than expected this year, yielding returns of 26.5% in the fiscal year ended June 2021, trailing the fund's 27.4% benchmark.
All pension funding data used in this story was compiled by The Pew Charitable Trusts and is for 2019. We also considered public-sector, state-level employment, both in raw numbers and as a share of overall employment, using data from the Bureau of Labor Statistics.
|Rank||State||Pension funding ratio||Pension assets ($, billions)||Pension liabilities ($, billions)||State government employees|