Abstract
Unfunded liabilities in public pension plans continue to loom over state governments nationwide. If net pension assets are determined using more realistic investment return assumptions, pension funding gaps are significantly wider than even the large sums reported in state financial documents. Unfunded liabilities of state-administered pension plans, using a proper, risk-free discount rate, now total over $5.96 trillion. The average state pension plan is funded at a mere 35 percent. This amounts to $18,300 of unfunded pension liabilities for every resident of the United States. Unaffordable and Unaccountable 2018 surveys the more than 280 state-administered public pension plans, detailing their assets and liabilities. The unfunded liabilities (the amount by which the present value of liabilities exceeds current assets) are reported using the investment return assumptions used by states, along with alternative measures more consistent with prudent risk management and more reasonable long-term market performance expectations. This report clearly illuminates the pervasive pension underfunding across the nation and details the assumptions and trends contributing to this crisis.