Before the coronavirus pandemic, state public pension debt was already over $1 trillion nationally and growing. Although the long-term effects of the COVID-19 economic crisis are unclear, initial estimates from the Pension Integrity Project at Reason Foundation suggest that public pension plans could see their unfunded liabilities skyrocket to between $1.5 trillion and $2 trillion if the latest returns fall between 0 percent and -15 percent for the current fiscal year.
As states and cities prepare to face mounting budget challenges, we can help you understand what impact the COVID-19 economic crisis will have on public pension plans across the nation.
In the tool [available by following the link], choose your preferred state public pension plans and investment return rate to see how their unfunded liabilities and funded ratios are being impacted by the market and economic downturn.
With the interactive tool, you can view how the COVID- 19 economic fallout may affect public pension plans in each state. The simple-to-use tool shows how state pension assets will react in a variety of economic scenarios. By selecting plans and toggling between a range of potential investment returns, you will be able to view how multiple plans’ funding ratios and total unfunded liabilities would change based on the selected market conditions.
Read the rest of the report at the Reason Foundation.
This article republishes selections from “Previewing the COVID-19 Impact on State Pension Plans” an article by the Pension Integrity Project for Reason Foundation, 4/22/2020.