Given the sophistication of finance in the 21st century, it is reasonable to think that America has a good understanding of how much in future pension benefits has been promised to teachers, librarians, school nurses, bus drivers, and other public school employees.
But calculating the shortfall in public school pension funding is a bit trickier than it may seem at first glance.
Equable Insights
All data are accurate as of 2025.
- Shortfall for All State and Local Plans: $1.3 trillion
- Shortfall for Plans that Include Teachers & Other Employees: $675.9 billion
- Shortfall for Teacher Pension Funds: $562.2 billion
Public School Pension Unfunded Liabilities 2025
The funding shortfall for America’s public school pensions ultimately depends on how we observe the data.
Equable Institute estimates that as of Dec. 31, 2025, when all retirement systems’ fiscal 2025 had closed, the shortfall for teacher pension funds managed by the 50 states and D.C. was $562.2 billion. Some of these teacher pensions are built into statewide retirement systems that cover more than teachers, so this estimate is based on removing the unfunded liabilities associated with non-public school employees.
When looking at all state and local retirement systems for all kinds of public workers, the funding shortfall is roughly $1.3 trillion. Many of those plans are specific to employee types, like public safety or municipal workers.
The funding shortfall of pension plans that cover teachers or public school noninstructional staff is $675.9 billion, as shown in the figure above. That number includes some state and city employees that are in the same pension systems. The portion of those unfunded liabilities attributable to teacher pension benefits, along with some other public school employees, is $562.2 billion.
But there are other reasonable ways to estimate the value of promised teacher pensions and what the funding shortfall on those plans is. The most common reason why numbers differ when reporting the funding shortfall for teacher pension funds is a lack of clarity on who exactly is being counted in the total.
Defining Teacher Pensions
First, the common phrase “teacher pensions” could be referring to retirement benefits for classroom teachers or all public school employees.
In California, “certificated” employees are those who have a credential to work in a classroom and could be teachers or administrators who have been teachers and maintain their credentials. By contrast, all other public school employees are considered “classified” workers. The pension fund CalSTRS is for certificated workers, while classified employees participate in CalPERS.
There are four other states — Louisiana, Missouri, Ohio, and Washington — that make this same division and have totally separate retirement systems for school employees that are not classroom teachers.
Most states, though, put all employees at public schools in the same retirement system, whether or not it is called a “teacher” pension fund. For example, Michigan and Pennsylvania have large pension funds called the “Public School Employees’ Retirement System.” Meanwhile, in Texas and New York, the “Teachers’ Retirement System” is actually for more workers than just teachers.
The $562.2 billion estimate above includes all statewide pension plans that provide benefits to classroom teachers. However, these plans also include more than just teachers in many cases. That means the number includes other public school employees from Michigan and New York (because they get the same benefits as teachers and there is no differentiation in the data) but not from California or Missouri (which have separate plans for nonteacher public school employees).
It would be reasonable to add the unfunded liabilities from California’s classified workers and the separate school employees systems from Louisiana, Missouri, Ohio, and Washington. In this case, the funding shortfall for all public school employees in state funds would add $37.5 billion to the total for 2025, of which roughly $33.0 billion is from the CalPERS plan for classified workers.
How We Estimate Liabilities
Second, some states bundle teachers into statewide pension funds that include other employees, and they aren’t always separated out.
In South Carolina, Nevada, and a dozen other states, teachers have the same benefits as state and municipal employees. A few states, like Maryland, provide data that show teacher benefits, assets, and unfunded liabilities separately. But most don’t.
To figure out, for example, that roughly one-third of the Florida Retirement System’s $30.8 billion unfunded liabilities are for public school employees, we look at reports that list out all of the participating employer units in FRS. Every state provides reports that show the share of liabilities for each employer, based on guidelines provided from the Government Accounting Standards Board. For any given school, academy, or school district, the share of the total is very small. But when we identify all of these employers in Florida that provide services to K–12 students, the shares add up to roughly 33.5% of the unfunded liabilities for FRS.
This approach can be applied to all retirement systems where teachers are bundled in with other public employees and estimate the share of the funding shortfall based on the share of employer participation. These figures are not as precise as using the raw data from each pension plan, but those are not reported publicly. Using this method produces a reasonable estimate that will be close to the actual number.
Sometimes, analysts won’t make these adjustments and instead will just report the total unfunded liabilities for retirement systems that include teachers. As of 2025 data, that number is $1.3 trillion, significantly higher than our estimate of $562.2 billion.
How to Account for Municipally Managed Plans
Third, there are a few cities that have their own teacher retirement systems. These are sometimes counted in reports and sometimes not.
A truly comprehensive estimate of teacher pension funding shortfalls should include data from New York City, Chicago, St. Louis, Kansas City, and St. Paul, and Fairfax County, Virginia, which all manage their own teacher retirement systems.
These municipally managed retirement systems are not formally the responsibility of the state legislature and state budget and so are sometimes not added to unfunded liability estimates for states themselves.
As of 2025, the seven municipal teacher pensions have a $18.7 billion shortfall.
The chart above shows the severity of the funding shortfall for retirement systems serving public schools across the country, based on who is counted in the calculation.
Each additional group of plans increases the amount of teacher pension debt incrementally.
