The 15 States Making America’s Pension Crisis Worse

Let’s face it: For many people, saving for retirement isn’t easy, and it’s getting harder. If you think you’re safe because you have a pension, think again. A huge shortfall globally means millions of pensions aren’t safe. The United States is more than $6 trillion short of where it needs to be right now and is tracking to be $137 trillion short by 2050. Every state has pension shortfalls, but some are worse than others. These are the 15 states making America’s pension crisis worse.

Research from the American Legislative Exchange Council shows just how bad the situation is for public pension plans around the country. Looking at the investment return assumptions used by states, ALEC calculates how much the promised pension amounts exceed current assets to arrive at the shortfall. States with larger populations have more public employees and more pensions to fund, but we’ll visit a small state with a big problem (page 4) and two medium-sized states with more than $350 billion in shortfalls (pages 12 and 13).

15. Colorado

pension displayed on calculator

Colorado has one of the biggest pension shortfalls in the U.S. | cacaroot/iStock/Getty Images

Pension shortfall: $118.3 billion

Population: 5,607,154

There are fewer than 500,000 people taking pensions in Colorado, but the state has one of the biggest shortfalls in the United States. The state is more than $118 billion in the hole in total, thanks in part to paying out twice as much from the pension fund as it takes in

Next: A state that’s virtually a replay of Colorado.

14. Minnesota

State Capital Building, Saint Paul, Minnesota, USA

Lawmakers in Minnesota’s capital of St. Paul are looking at a serious pension shortfall. | 7Michael/Getty images

Pension shortfall: $118.7 billion

Population: 5,576,606

Minnesota is basically a carbon copy of Colorado, the state we just visited. The populations and pension shortfalls are about the same in each state. Minnesota is a little better off with its $118 billion shortfall paired with close to 600,000 public pensions, but it’s still one of the states making America’s pension crisis worse.

Next: Local pension plans outnumber state plans five to one.

13. Washington

The Washington State Capitol building under a partly cloudy sky

Washington has 10 state-level pension plans. | Seastock/Getty Images

Pension shortfall: $120.5 billion

Population: 7,405,743

Washington runs 10 state-level pension plans, and there are another 50 plans at the local level. When you put it all together, the state would come up $120.5 billion short if it had to pay out all of its 429,599 public pensions.

Next: A small state with a huge problem.

12. Connecticut

Connecticut State Capitol in Hartford,

Connecticut is a small state with more than 212 public pension plans. | SeanPavonePhoto/iStock/Getty Images

Pension shortfall: $127.7 billion

Population: 3,588,184

Spoiler alert: Connecticut is the smallest state we’ll visit, but it has one of the biggest pension problems. The state has 176,674 current and former employees taking pensions (also the smallest number on our list) as of 2016, yet with 212 total plans and more than $127 billion in shortfalls, this small New England state is one of the states making America’s pension crisis worse.

Next: It’s not a long trip to reach our next state in trouble.

11. Massachusetts

Boston, Massachusetts, USA

Like its neighbor Connecticut, Massachusetts is also facing a pension shortfall.| Sean Pavone/Getty Images

Pension shortfall: $134.9 billion

Population: 6,859,819

Connecticut’s northern neighbor faces a similar pension crisis. Massachusetts has close to 400,000 people taking pensions, and it’s nearly $135 billion short of what it needs to fund those pensions into the future.

Next: When $93.5 billion isn’t enough.

10. Georgia

Downtown of Athens

Georiga has more than $90 billion is cash behind its public pension plans, but that’s not enough. | SeanPavonePhoto/iStock/Getty Images

Pension shortfall: $143 billion

Population: 10,429,379

According to Ballotpedia, Georgia has roughly $93.5 billion in cash and assets behind its public pension plans. It seems like a significant amount until you consider the state is billions short of what it needs to pay for the pensions. It paid $7.1 billion to pensions in 2016, but only $3.8 billion went into the coffers.

Next: Problems galore in our next state.

9. Michigan

Firefighters battle an apartment fire

Pension shortfalls could jeopardize the retirement prospects of public employees in Michigan.  | Eric Thayer/Getty Images

Pension shortfall: $168.1 billion

Population: 9,962,311

Michigan is one of the states people don’t want to live in anymore, and there are lots of reasons. The Flint water crisis, vanishing manufacturing jobs, a serial killer at large, and a massive pension shortfall are just a few of the many problems in Michigan.

Next: You need a calculator to keep track of the many pension plans in this state.

8. Pennsylvania

Philadelphia, Pennsylvania, USA

Pennsylvania has a huge number of pension plans. | Sean Pavone/iStock/Getty Images

Pension shortfall: $223.1 billion

Population: 12,805,537

Pennsylvania has 2,261 total pension plans, but just three at the state level. It has 677,508 pensioners within its borders, which works out to one pension plan for every 300 employees. No matter how you look at it, the Keystone State is one of the states making America’s pension crisis worse thanks to more than $223 billion in shortfalls.

Next: Pension problems are another reason to hate this state.

7. Florida

protest against Florida Gov. Rick Scott's state budget

Public employees in Florida protest proposed changes to state-run pension plans in 2011. | Joe Raedle/Getty Images 

Pension shortfall: $226.5 billion

Population: 29,984,400

The wealth gap and ravenous mosquitoes are two reasons Florida is the most-hated state in America. For the 737,000 people on public pensions, the $226.5 billion funding shortfall is another reason to hate the Sunshine State. The state paid $11.8 billion to active pensions in 2016, but just $5.2 billion went in, which shows how Florida is one of the states making America’s pension crisis worse.

Next: Public employees don’t have it nearly as good as people in the private sector.

6. New Jersey

New Jersey Gov.-elect Phil Murphy

New Jersey governor Phil Murphy has inherited a serious pension shortfall. | Eduardo Munoz Alvarez/Getty Images

Pension shortfall: $248.7 billion

Population: 9,005,644

Merck and Johnson & Johnson, two New Jersey-based corporations, are two of the few companies that still give out pensions, and employees love them for it. Public employees in New Jersey aren’t as lucky. The state pension fund paid out twice the amount it received in 2016, and all told the Garden State is nearly $250 billion short of where it needs to be to keep pension payments going.

Next: Where pension payments are 61% higher than the money put in.

5. New York

A Metropolitan Transportation Authority (MTA) subway conducto

Public workers in New York state are looking at a pension shortfall of more than $345 billion. | Spencer Platt/Getty Images

Pension shortfall: $345.2 billion

Population: 19,849,399

According to Ballotpedia, New York paid nearly $32 billion to pensioners in 2016. However, the state had just $19.7 billion in contributions. When you do the math, payments are roughly 61% more than contributions, and unsustainable number making New York one of the states facing pension problems.

Next: A ton of taxes can’t keep this state from showing up on our list.

4. Ohio

Ohio Statehouse

Ohio’s pension liabilities are more than double the cash and investments it has behind its plans. | Mike Munden/Getty Images

Pension shortfall: $354.6 billion

Population: 11,658,609

As of 2016, Ohio had $175.2 billion in cash and investments behind its pension plans. It sounds like a lot until you consider its liabilities are more than twice that amount. Even having a huge tax burden can’t prevent Ohio from being one the states making America’s pension crisis worse.

Next: Another Midwest state with a huge problem.

3. Illinois

The state capitol building in Springfield, Illinois.

Pension woes are a serious issue in Illinois. | fotoguy22/iStock/Getty Images

Pension shortfall: $388.3 billion

Population: 12,802,203

Illinois’ financial problems are so bad that no amount of estate taxes or potential legal marijuana revenue will fix them. It’s one of the states making America’s pension crisis worse thanks to a more than $388 billion shortfall. It’s almost as much as our next state, but with less than half the number of pensions.

Next: One year shows why this state is in trouble.

2. Texas

Ckaris Williams, a teacher and Hurricane Katrina evacuee, prepares her classroom

Seven public pension plans in Texas cover workers like teachers, judges, and firefighters. | Dave Einsel/Getty Image 

Pension shortfall: $397.3 billion

Population: 28,304,596

The Lone Star state has seven public pension plans covering firefighters, teachers, judges, and the other 1.9 million people on pensions in the state. How did things get so bad? Just take a look at 2016, when Texas paid $17.2 billion for pensions but collected just $11.3 billion.

Next: No. 1 among states making America’s pension crisis worse, and it’s not even close.

1. California

A sign stands in front of California Public Employees' Retirement System building

CalPERS pays pension benefits to many retired public workers in California. | Max Whittaker/Getty Images

Pension shortfall: $987.7 billion

Population: 39,536,653

You shouldn’t be surprised seeing California take the top spot on our list, Like we said back on page 1, bigger states have more public employees and more pensions to fund. With 2.5 million pensions as of 2016 and 1.8 million working employees in plans, California is nearly $1 trillion behind when it comes to funding its pensions.

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