Most American workers can’t get pensions anymore, though state and local government employees are an exception. But their pensions — providing regular income in retirement — have become a costly burden for states and their citizens.
Many state pension plans, covering government workers at both the state and local level, are underfunded. There’s not enough money to pay all the benefits promised to current and future retirees, and residents might one day have to cough up more tax dollars to cover those costs.
Using data from the Pew Charitable Trusts, the Foundation for Economic Education, and Governing.com, we’ve ranked the states, going from those with the healthiest pensions systems to the ones with the biggest pension problems — potentially for taxpayers.
Editor’s note: Governing.com’s numbers of state and local government employees per state have been rounded and doubled, since the data excluded education workers. Governing says they account for roughly half of each workforce.
Wisconsin state capital in Madison Wisconsin
Randy Kostichka / Shutterstock
The Wisconsin Capitol building.
The pension program in Wisconsin is **102.6% funded **and has a $2.6 billion surplus.
There is no pension gap in Wisconsin. The pension fund will provide enough money to pay out all of the retirement benefits that have been promised to state and local government employees in Wisconsin.
In this state, led by Democratic Gov. Tony Evers, approximately 229,000 workers police highways, staff parks, guard prisons, teach in schools and state universities, fix roads, work in health care, and provide many other services.
49. South Dakota
The pension program in South Dakota is 100.1% funded and has a $9.1 million surplus.
With no pension gap, the system has enough money to pay out all of the retirement benefits state and local government employees in South Dakota are counting on.
There are roughly 38,000 of those workers in this state, led by Republican Gov. Kristi Noem. If your employer offers no pension and no 401(k), you do have other options for saving for retirement.
The pension program in Tennessee is 96.5% funded and has $1.7 billion in debt.
To fill its pension gap, the state would need to collect $253 from each resident — adults and children. That would provide enough funding to pay out all of the retirement benefits promised to state and local government employees in Tennessee.
In this state, led by Republican Gov. Bill Lee, approximately 310,000 of those workers keep the peace, teach in schools and universities and provide many other services.
The nation’s biggest pension problem is in the Bluegrass State. The program in Kentucky is only 33.9% funded and is $42.9 billion in debt.
To fill its pension gap, the state would need to collect $9,632 from each adult and child. That would provide enough funding to pay out all of the retirement benefits promised to public employees in Kentucky.
The state, led by Republican Gov. Matt Bevin, currently has around 194,000 state and local government workers, according to Governing.com data.