The pension has long been a standard part of retirement for many Americans, particularly for public sector employees like police officers and teachers. Offering a pension — a set annual income for long-time employees after they retire — used to help attract quality employees by offering them the promise of financial security in their golden years.
Retirement Planning: How Much the Average Person 65 and Older Spends Monthly
Read More: 7 Bills You Never Have To Pay When You Retire
Does the same hold true today? Private companies rarely offer pensions anymore, and states are struggling with pension commitments they made decades ago. The relative security of a pension is tied to the well-being of the government that offers it, and a great many U.S. states currently have unfunded pension liabilities. GOBankingRates analyzed all 50 states in terms of unfunded pension liabilities for 2021 and 2022, as well as unfunded pension liabilities per capita for 2021 and 2022, sourced from American Legislative Exchange Council.
The results are in, with the top ten states that are well-prepared to continue funding their pension systems, and the bottom ten that might find themselves in fiscal hot water in the near future. Did your state make the list?
Best States For Pensions
10. Minnesota
- 2021 Unfunded Liabilities: $148,316,886,233
- 2022 Unfunded Liabilities: $112,677,522,555
- 2021 Unfunded Liabilities per Capita: $25,990.89
- 2022 Unfunded Liabilities per Capita: $19,742.39
9. Iowa
- 2021 Unfunded Liabilities: $69,171,677,447
- 2022 Unfunded Liabilities: $53,942,069,863
- 2021 Unfunded Liabilities per Capita: $21,681.40
- 2022 Unfunded Liabilities per Capita: $16,893.43
8. Indiana
- 2021 Unfunded Liabilities: $69,135,444,681
- 2022 Unfunded Liabilities: $54,732,139,147
- 2021 Unfunded Liabilities per Capita: $10,188.66
- 2022 Unfunded Liabilities per Capita: $8,041.77
I Was 50 With No Retirement Savings: Here’s How I Turned It Around and Retired Comfortably
7. Florida
- 2021 Unfunded Liabilities: $302,873,520,482
- 2022 Unfunded Liabilities: $234,011,651,429
- 2021 Unfunded Liabilities per Capita: $14,062.16
- 2022 Unfunded Liabilities per Capita: $11,236.20
6. North Carolina
- 2021 Unfunded Liabilities: $174,143,444,573
- 2022 Unfunded Liabilities: $132,283,080,396
- 2021 Unfunded Liabilities per Capita: $16,681.38
- 2022 Unfunded Liabilities per Capita: $12,537.30
5. Utah
- 2021 Unfunded Liabilities: $55,458,770,068
- 2022 Unfunded Liabilities: $44,620,043,795
- 2021 Unfunded Liabilities per Capita: $16,951.49
- 2022 Unfunded Liabilities per Capita: $13,367.40
4. Oklahoma
- 2021 Unfunded Liabilities: $80,636,914,666
- 2022 Unfunded Liabilities: $61,068,329,112
- 2021 Unfunded Liabilities per Capita: $20,366.18
- 2022 Unfunded Liabilities per Capita: $15,318.25
3. New York
- 2021 Unfunded Liabilities: $508,708,887,680
- 2022 Unfunded Liabilities: $368,166,261,391
- 2021 Unfunded Liabilities per Capita: $25,182.05
- 2022 Unfunded Liabilities per Capita: $18,560.59
2. Washington
- 2021 Unfunded Liabilities: $1657,432,460,443
- 2022 Unfunded Liabilities: $125,178,721,352
- 2021 Unfunded Liabilities per Capita: $21,729.57
- 2022 Unfunded Liabilities per Capita: $16,103.14
1. Idaho
- 2021 Unfunded Liabilities: $29,276,256,967
- 2022 Unfunded Liabilities: $20,664,561,618
- 2021 Unfunded Liabilities per Capita: $15,918.74
- 2022 Unfunded Liabilities per Capita: $11,236.20
Worst States For Pensions
10. Connecticut
- 2021 Unfunded Liabilities: $145,779,590,837
- 2022 Unfunded Liabilities: $125,178,721,352
- 2021 Unfunded Liabilities per Capita: $40,427.58
- 2022 Unfunded Liabilities per Capita: $34,717.89
9. New Mexico
- 2021 Unfunded Liabilities: $76,211,334,592
- 2022 Unfunded Liabilities: $67,502,035,646
- 2021 Unfunded Liabilities per Capita: $35,990.81
- 2022 Unfunded Liabilities per Capita: $31,902.63
8. New Jersey
- 2021 Unfunded Liabilities: $370,157,297,823
- 2022 Unfunded Liabilities: $321,059,516,097
- 2021 Unfunded Liabilities per Capita: $39,849.02
- 2022 Unfunded Liabilities per Capita: $34,644.98
7. Massachusetts
- 2021 Unfunded Liabilities: $191,086,201,505
- 2022 Unfunded Liabilities: $175,167,312,917
- 2021 Unfunded Liabilities per Capita: $27,181.86
- 2022 Unfunded Liabilities per Capita: $25,078.63
6. Illinois
- 2021 Unfunded Liabilities: $533,727,891,857
- 2022 Unfunded Liabilities: $467,902,338,216
- 2021 Unfunded Liabilities per Capita: $41,656.79
- 2022 Unfunded Liabilities per Capita: $36,925.66
5. Alabama
- 2021 Unfunded Liabilities: $92,734,851,779
- 2022 Unfunded Liabilities: $93,824,726,335
- 2021 Unfunded Liabilities per Capita: $18,457.35
- 2022 Unfunded Liabilities per Capita: $18,616.47
4. Hawaii
- 2021 Unfunded Liabilities: $58,122,692,070
- 2022 Unfunded Liabilities: $53,129,262,556
- 2021 Unfunded Liabilities per Capita: $39,939.43
- 2022 Unfunded Liabilities per Capita: $36,508.16
3. California
- 2021 Unfunded Liabilities: $1,530,649,405,907
- 2022 Unfunded Liabilities: $1,405,052,021,581
- 2021 Unfunded Liabilities per Capita: $38,713.16
- 2022 Unfunded Liabilities per Capita: $35,786.97
2. Alaska
- 2021 Unfunded Liabilities: $31,331,382,418
- 2022 Unfunded Liabilities: $33,761,865,724
- 2021 Unfunded Liabilities per Capita: $42,829.02
- 2022 Unfunded Liabilities per Capita: $46,080.40
1. Nevada
- 2021 Unfunded Liabilities: $82,252,281,510
- 2022 Unfunded Liabilities: $99,000,289,435
- 2021 Unfunded Liabilities per Capita: $26,493.56
- 2022 Unfunded Liabilities per Capita: $31,488.73
Joel Anderson contributed to the reporting for this article.
Methodology: GOBankingRates analzyed all 50 states in terms of three overarching factors: (1) Unfunded pension liabilities for 2021 and 2022, (2) unfunded pension liabilities per capita for 2021 and 2022, (3) funding ratio of public pension plans for 2021 and 2022, sourced from American Legislative Exchange Council. States were scored using these three factors, and scored their respective for year-over-year change for each metric. Scores were combined, with unfunded pension liabilities receiving half weight since larger states naturally have larger liabilities, while all other factors received full weighting. All data was collected and up to date as of September 25, 2023.
More From GOBankingRates
- Pocket an Extra $403 Per Month With This Simple Hack
- 8 Things Frugal People Never Do at the Start of a New Year
- Experts: Make These 7 Money Resolutions If You Want To Become Rich on an Average Salary
- How to Earn an Extra $500 a Year on Your Savings
This article originally appeared on GOBankingRates.com: 10 Best and 10 Worst States for Pensions
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
