Today, Equable Institute released the 2024 edition of it’s annual report, State of Pensions. The report, State of Pensions 2024: The Hidden Cost of Pension Debt Paralysis, analyzes trends in public pension funding, investments, contributions, cash flows, and benefits for 225 of the largest statewide and municipal retirement systems in all 50 states (e.g., retirement plans with at least $1 billion in accrued liabilities).

State and municipal retirement systems are on track to outperform their investment targets and experience solid improvements to the national average funded ratio in 2024, according to Equable Institute’s State of Pensions 2024 report. While last year’s investment gains left unfunded liabilities stagnant at $1.61 trillion, bringing the national aggregated funded ratio to 75.8%, 2024 is likely to be a more positive year for pension funded status on average. Equable estimates that the aggregate funded ratio for U.S. state and local pension funds will rise to 80.6% in 2024, and unfunded liabilities will decrease slightly to $1.34 trillion.

Despite positive signals for America’s public retirement systems this year, unfunded liabilities have remained paralyzed at or above the $1 trillion level since the Great Recession. A new historical analysis of the root causes of pension debt finds that underperforming investment returns, interest costs that outpace contributions, and improvements to actuarial assumptions are the primary drivers of these persistent unfunded liabilities.

 

Click Here to Read the Report