At the end of fiscal year 2023, the average funded ratio for American public pension plans was 78.1%. While this is a modest improvement over the losses of 2022, it is also a continuation of the fragile funded status that has persisted for more than a decade and a half after the financial crisis.

Once all public pension plans release their 2023 data, we estimate that unfunded liabilities will be $1.44 trillion. The combined funded status for the top state and local retirement systems will be 78.1%, based on available data through December 31, 2023. This is up from the 74.9% funded ratio during fiscal year 2022.

Despite modest improvements in funded status and unfunded liabilities, investment returns tell a more complex story. Strong investment returns in the last few months of the year drove the average investment return to 7.47%, beating the average 6.9% assumed rate of return. But, on a plan-by-plan basis, just 53% of plans beat their investment assumptions. Meaning 2023 was much better to some plans than others.

There’s no question that the aggregate funded status for public pension plans while improved is still mediocre. But, funded ratios and unfunded liabilities vary widely across states and plans. Below, we look at public pension funded ratios ranked by plan and by state.

State of Pensions 2023 | State Funded Status Rankings | Plan Funded Status Details

The Top 10 Plans by Funded Status for 2023

The best funded pension plans, as of fiscal year 2023, have a few things in common. Recently designed plans with cost-sharing components, plans with risk-sharing tools, and legacy plans with a multi-decade history of strong funded status all fared well.

The Bottom 15 Plans by Funded Status for 2023

The worst funded pension plans are largely from Illinois, New Jersey, Connecticut, and Kentucky. Among the worst are a few plans funded on a pay-as-you-go basis. Here are the 15 worst pension plans by funded ratio.

*Estimate based partially on reported preliminary returns and partially on asset allocation and benchmark returns.
**Estimate based on asset allocation and benchmark returns.

2023 Funded Status by State

A Full List of Plans by 2023 Funded Status