Public pensions

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Public pensions

Pension health by state
Pension terms
Pensions on the ballot
State finances on the ballot

Public pensions provide monetary beneﬁts to public workers when they retire. State pension systems vary considerably in their organization, management, and accounting principles, making them difficult to compare. The data below come primarily for the United States Census Bureau.

HIGHLIGHTS
According to the United States Census Bureau, as of fiscal year 2015, there were a total of 5,681 public pension systems with 14,716,844 members among them.
Contributions to public pension systems in fiscal year 2015 totaled $180 billion, with 70.34 percent coming from government sources.
Public pension systems made $266 billion in payments in fiscal year 2015.

According to reports based on the most recent available data, most states' pension plans continued to be underfunded below the 80 percent considered necessary for a healthy fund. Decreased funding and increasing liabilities since the 2008 recession continued to put pressure on local and state budgets, in some cases leading to bankruptcy. Higher pension costs can result in higher taxes, less intergovernmental aid for services, lower credit ratings, and higher interest rates on state borrowing.^[1]

Contributions and payments

In fiscal year 2015, contributions to public pension systems in the United States totaled $180.2 billion. Of this total, $131.7 billion, or 70.34 percent, came from governments, while the remainder came from employee contributions. The map below compares government contributions to public pension plans as percentages of total contributions. For states shaded with darker colors, government contributions constituted a greater share of total contributions. For states shaded with lighter colors, government contributions constituted a smaller share of total contributions. The table below the map provides further details about contributions to public pensions. To see the data in the table, click "[show]" in the table header.^[2]

Government contributions to public pensions as percentages, fiscal year 2015

Pension contributions, fiscal year 2015 (dollars in thousands)
State	Total contributions from employees and employers	Employee contributions		Government contributions		Earnings on investments
State	Total contributions from employees and employers	Contributions	Percentage of total	Contributions	Percentage of total	Earnings on investments
Alabama	$1,981,399	$747,686	37.74%	$1,233,713	62.26%	$631,266
Alaska	$3,092,490	$146,588	4.74%	$2,945,902	95.26%	$217,014
Arizona	$3,056,358	$1,282,587	41.96%	$1,773,771	58.04%	$1,689,414
Arkansas	$1,080,954	$213,965	19.79%	$866,990	80.21%	$1,267,733
California	$34,129,294	$9,455,671	27.71%	$24,673,623	72.29%	$28,304,726
Colorado	$2,255,088	$781,756	34.67%	$1,473,331	65.33%	$3,609,957
Connecticut	$3,292,112	$742,085	22.54%	$2,550,027	77.46%	$2,750,689
Delaware	$360,435	$77,074	21.38%	$283,361	78.62%	$437,355
District of Columbia	$319,315	$68,270	21.38%	$251,045	78.62%	$626,985
Florida	$5,724,529	$1,627,838	28.44%	$4,096,691	71.56%	$8,587,428
Georgia	$3,376,261	$832,412	24.65%	$2,543,849	75.35%	$3,944,124
Hawaii	$941,298	$223,505	23.74%	$717,793	76.26%	$601,281
Idaho	$556,660	$212,104	38.10%	$344,556	61.90%	$433,234
Illinois	$12,744,871	$2,738,744	21.49%	$10,006,127	78.51%	$8,117,747
Indiana	$2,228,342	$350,551	15.73%	$1,877,791	84.27%	$1,687,968
Iowa	$1,257,655	$491,077	39.05%	$766,578	60.95%	$1,309,527
Kansas	$1,181,468	$401,212	33.96%	$780,256	66.04%	$740,133
Kentucky	$1,957,416	$600,283	30.67%	$1,357,133	69.33%	$1,728,922
Louisiana	$3,790,158	$735,074	19.39%	$3,055,085	80.61%	$2,688,345
Maine	$528,055	$161,569	30.60%	$366,486	69.40%	$292,979
Maryland	$3,555,737	$920,168	25.88%	$2,635,569	74.12%	$2,386,964
Massachusetts	$5,129,721	$1,968,873	38.38%	$3,160,848	61.62%	$5,606,935
Michigan	$4,787,637	$661,508	13.82%	$4,126,129	86.18%	$3,440,909
Minnesota	$2,338,593	$992,834	42.45%	$1,345,759	57.55%	$3,812,433
Mississippi	$1,590,127	$560,099	35.22%	$1,030,028	64.78%	$938,353
Missouri	$3,049,574	$966,078	31.68%	$2,083,496	68.32%	$4,090,531
Montana	$525,080	$190,308	36.24%	$334,772	63.76%	$488,406
Nebraska	$747,612	$297,019	39.73%	$450,593	60.27%	$785,570
Nevada	$1,551,135	$114,326	7.37%	$1,436,809	92.63%	$1,435,051
New Hampshire	$558,282	$208,701	37.38%	$349,581	62.62%	$288,260
New Jersey	$4,727,196	$2,004,557	42.40%	$2,722,639	57.60%	$2,415,688
New Mexico	$1,261,974	$546,091	43.27%	$715,883	56.73%	$713,324
New York	$19,895,838	$1,419,171	7.13%	$18,476,667	92.87%	$23,942,359
North Carolina	$2,977,264	$1,237,454	41.56%	$1,739,811	58.44%	$2,065,865
North Dakota	$416,305	$141,399	33.97%	$274,906	66.03%	$334,947
Ohio	$6,999,819	$2,983,865	42.63%	$4,015,954	57.37%	$10,253,096
Oklahoma	$1,768,454	$473,684	26.79%	$1,294,770	73.21%	$1,019,033
Oregon	$1,884,986	$579,606	30.75%	$1,305,380	69.25%	$3,205,148
Pennsylvania	$7,020,836	$1,840,962	26.22%	$5,179,874	73.78%	$7,535,422
Rhode Island	$694,479	$104,433	15.04%	$590,047	84.96%	$317,178
South Carolina	$2,035,353	$826,926	40.63%	$1,208,427	59.37%	$807,001
South Dakota	$240,754	$114,544	47.58%	$126,210	52.42%	$477,991
Tennessee	$1,661,667	$338,678	20.38%	$1,322,988	79.62%	$1,886,047
Texas	$9,653,886	$3,981,279	41.24%	$5,672,607	58.76%	$4,688,881
Utah	$1,043,961	$38,776	3.71%	$1,005,185	96.29%	$1,828,778
Vermont	$237,553	$84,227	35.46%	$153,326	64.54%	$16,419
Virginia	$3,925,359	$890,692	22.69%	$3,034,668	77.31%	$3,708,276
Washington	$2,594,885	$778,267	29.99%	$1,816,618	70.01%	$3,834,671
West Virginia	$1,016,291	$189,587	18.65%	$826,704	81.35%	$562,408
Wisconsin	$2,089,569	$963,512	46.11%	$1,126,057	53.89%	$5,816,893
Wyoming	$316,700	$159,375	50.32%	$157,325	49.68%	$366,414
United States	$180,150,785	$48,467,050	29.66%	$131,683,738	70.34%	$168,736,078
Source: United States Census Bureau

Public pension systems in the United States paid out a total of $266.1 billion in fiscal year 2015. The table below details the payments in each state. To see the data in the table, click "[show]" in the table header.^[2]

Pension payments, fiscal year 2015 (dollars in thousands)
State	Total payments	Benefits	Withdrawals	Other
Alabama	$3,474,620	$3,321,752	$115,293	$37,575
Alaska	$1,181,547	$1,148,079	$12,450	$21,018
Arizona	$4,531,178	$3,870,714	$303,532	$356,932
Arkansas	$1,733,042	$1,599,420	$25,744	$107,880
California	$48,501,489	$44,861,838	$467,760	$3,171,895
Colorado	$5,096,999	$4,643,046	$193,205	$260,747
Connecticut	$4,416,643	$4,334,387	$27,010	$55,245
Delaware	$647,320	$625,630	$6,832	$14,858
District of Columbia	$397,003	$340,691	$13,404	$42,908
Florida	$10,923,236	$9,986,122	$177,232	$759,889
Georgia	$6,788,499	$6,478,447	$172,125	$137,926
Hawaii	$1,162,418	$1,093,065	$10,508	$58,845
Idaho	$853,107	$797,883	$0	$55,224
Illinois	$17,557,862	$16,540,643	$329,865	$687,353
Indiana	$2,891,115	$2,467,535	$185,424	$238,162
Iowa	$2,069,216	$1,927,608	$48,238	$93,372
Kansas	$1,756,164	$1,610,783	$67,203	$78,177
Kentucky	$3,869,169	$3,666,352	$52,280	$150,537
Louisiana	$4,425,517	$4,188,444	$78,722	$158,353
Maine	$974,430	$839,260	$68,482	$66,688
Maryland	$5,029,705	$4,803,697	$82,315	$143,692
Massachusetts	$7,217,066	$6,555,354	$210,913	$450,795
Michigan	$8,776,832	$8,111,731	$209,493	$455,611
Minnesota	$4,583,712	$4,444,689	$57,772	$81,250
Mississippi	$2,510,513	$2,284,168	$119,557	$106,788
Missouri	$5,336,873	$4,585,567	$113,833	$637,474
Montana	$765,094	$702,021	$21,379	$41,692
Nebraska	$955,070	$850,318	$89,160	$15,591
Nevada	$2,036,042	$1,958,735	$25,638	$51,669
New Hampshire	$717,311	$657,762	$26,501	$33,048
New Jersey	$9,874,093	$9,618,372	$204,797	$50,924
New Mexico	$2,052,738	$1,903,109	$82,483	$67,147
New York	$31,166,654	$29,193,572	$148,321	$1,824,758
North Carolina	$5,446,850	$5,295,637	$128,533	$22,678
North Dakota	$357,194	$330,832	$5,285	$21,076
Ohio	$15,053,026	$14,164,956	$578,005	$310,065
Oklahoma	$2,304,808	$2,172,346	$56,459	$76,004
Oregon	$5,022,442	$4,409,891	$18,797	$593,752
Pennsylvania	$11,697,488	$10,759,005	$129,768	$808,721
Rhode Island	$1,040,474	$1,000,407	$12,155	$27,915
South Carolina	$3,108,828	$2,944,581	$112,628	$51,619
South Dakota	$548,898	$493,718	$27,074	$28,106
Tennessee	$3,038,331	$2,866,942	$36,186	$135,203
Texas	$15,721,861	$14,370,409	$819,971	$531,482
Utah	$1,352,099	$1,335,738	$5,129	$11,232
Vermont	$319,067	$291,205	$6,944	$20,918
Virginia	$5,719,004	$5,096,834	$122,382	$499,789
Washington	$4,289,312	$3,878,741	$76,662	$333,909
West Virginia	$1,183,697	$1,163,256	$18,333	$2,107
Wisconsin	$5,474,485	$5,025,773	$42,118	$406,593
Wyoming	$501,078	$472,593	$22,415	$6,070
United States	$286,451,219	$266,083,658	$5,966,315	$14,401,262
Source: United States Census Bureau

Membership and participation

According to the United States Census Bureau, there were a total of 5,681 public pension systems across the nation as of fiscal year 2015. Of those systems, 291 were administered at the state level, and 5,390 at the local level. In those 5,681 systems, a total of 14.7 million people were members. Of these members, 74.56 percent were active. Active members are defined as members who are making contributions or receiving benefits from a pension system. The map below details what percentage of members are active in each state; a darker shade indicates a higher percentage of active members while a lighter shade indicates a lower percentage of active members. The table below the map provides further details for each state. Click "[show]" in the table below to display the data.^[2]

Active membership in public pension plans as percentages, 2015

General pension system information, 2015
State	Systems		Total members	Active members		Inactive members
State	State	Local	Total members	Members	Percent of total	Members	Percent of total
Alabama	7	17	258,622	233,535	90.30%	25,087	9.70%
Alaska	4	2	36,269	25,001	68.93%	11,268	31.07%
Arizona	4	99	497,227	260,773	52.45%	236,454	47.55%
Arkansas	7	188	167,494	134,387	80.23%	33,106	19.77%
California	10	78	2,479,008	1,787,313	72.10%	691,695	27.90%
Colorado	10	65	464,608	239,123	51.47%	225,485	48.53%
Connecticut	N/A	206	196,761	175,650	89.27%	21,111	10.73%
Delaware	8	17	49,675	45,852	92.30%	3,822	7.69%
District of Columbia	0	7	21,940	19,570	89.20%	2,370	10.80%
Florida	1	N/A	735,418	598,369	81.36%	137,049	18.64%
Georgia	11	45	678,637	400,285	58.98%	278,352	41.02%
Hawaii	1	0	74,723	67,310	90.08%	7,413	9.92%
Idaho	3	3	78,924	67,062	84.97%	11,862	15.03%
Illinois	6	654	966,921	601,394	62.20%	365,527	37.80%
Indiana	8	239	277,160	226,713	81.80%	50,447	18.20%
Iowa	4	8	240,135	172,307	71.75%	67,828	28.25%
Kansas	4	N/A	205,436	157,483	76.66%	47,953	23.34%
Kentucky	6	28	365,261	218,259	59.75%	147,002	40.25%
Louisiana	14	18	298,986	200,171	66.95%	98,815	33.05%
Maine	1	0	60,913	51,145	83.96%	9,768	16.04%
Maryland	7	72	295,000	238,652	80.90%	56,347	19.10%
Massachusetts	14	N/A	419,717	314,756	74.99%	104,961	25.01%
Michigan	6	142	331,843	295,764	89.13%	36,079	10.87%
Minnesota	12	588	568,470	309,659	54.47%	258,811	45.53%
Mississippi	4	0	295,054	157,918	53.52%	137,136	46.48%
Missouri	12	78	388,454	288,204	74.19%	100,250	25.81%
Montana	9	93	81,686	53,450	65.43%	28,236	34.57%
Nebraska	5	26	105,866	75,456	71.28%	30,410	28.72%
Nevada	3	N/A	118,214	103,143	87.25%	15,071	12.75%
New Hampshire	2	3	60,028	49,240	82.03%	10,788	17.97%
New Jersey	8	9	566,101	464,603	82.07%	101,498	17.93%
New Mexico	5	0	171,888	118,510	68.95%	53,378	31.05%
New York	3	6	1,349,274	1,180,822	87.52%	168,452	12.48%
North Carolina	7	62	682,750	485,899	71.17%	196,851	28.83%
North Dakota	4	14	42,331	35,196	83.14%	7,135	16.86%
Ohio	7	1	1,293,288	656,495	50.76%	636,793	49.24%
Oklahoma	7	14	189,703	160,292	84.50%	29,411	15.50%
Oregon	2	17	317,594	267,646	84.27%	49,948	15.73%
Pennsylvania	3	2,257	669,873	504,444	75.30%	165,429	24.70%
Rhode Island	5	34	42,225	32,757	77.58%	9,468	22.42%
South Carolina	4	5	387,858	214,713	55.36%	173,145	44.64%
South Dakota	1	2	57,109	40,441	70.81%	16,668	29.19%
Tennessee	2	39	313,237	270,943	86.50%	42,294	13.50%
Texas	7	135	1,800,760	1,477,698	82.06%	323,061	17.94%
Utah	8	2	145,983	102,552	70.25%	43,431	29.75%
Vermont	3	7	31,649	25,655	81.06%	5,994	18.94%
Virginia	4	N/A	556,351	399,708	71.84%	156,643	28.16%
Washington	10	50	383,830	319,493	83.24%	64,336	16.76%
West Virginia	8	57	100,571	75,459	75.03%	25,112	24.97%
Wisconsin	1	3	439,006	273,091	62.21%	165,915	37.79%
Wyoming	9	0	69,544	42,483	61.09%	27,061	38.91%
United States	291	5390	20,429,375	14,716,844	74.56%	5,712,526	25.44%
Source: United States Census Bureau

Cash and investment holdings

Investments are a crucial part of the pension process. The goal is that, by investing pension contributions, the pensioner will receive more money when he or she retires than he or she and the employer were able to contribute. These investments can come in the form of cash investments, short-term investments, securities, or other investments. Cash investments are usually low-risk, short-term investments that have a lower rate of return than other types of investments. Short-term investments are riskier than cash investments, but have the potential for greater returns. Securities can refer to stocks, bonds, or other types of financial certificates that hold some sort of financial value. As the values of these securities change, they can be traded to make a profit. While there are other applications of securities investments, this represents one of the most common practices.^[3]^[4]^[5]

As of fiscal year 2015, state and local pension systems held $3.81 trillion in total cash and investment holdings. The table below summarizes pension system cash and investment holdings for each state. The columns labeled "Total cash and short-term investments," "Total securities," and "Total other investments" are subsets of the grand total. All dollar amounts displayed should be multiplied by 1,000 ($240,000 is equal to $240,000,000). Click "[show]" in the table below to display the data.^[2]

Total cash and investment holdings, fiscal year 2015 (dollars in thousands)
State	Grand total	Total cash and short-term investments	Total securities	Total other investments
Alabama	$34,929,238	$1,273,620	$29,607,122	$4,048,497
Alaska	$14,368,987	$166,708	$8,216,583	$5,985,696
Arizona	$47,117,029	$1,872,009	$39,913,642	$5,331,378
Arkansas	$26,501,575	$793,078	$15,061,516	$10,646,981
California	$770,146,756	$31,875,108	$656,894,714	$81,376,934
Colorado	$53,522,332	$1,529,287	$46,893,100	$5,099,946
Connecticut	$38,425,038	$2,003,751	$31,608,540	$4,812,747
Delaware	$10,002,364	$674,279	$7,213,819	$2,114,266
District of Columbia	$9,453,409	$143,672	$8,745,724	$564,013
Florida	$187,394,077	$4,238,924	$170,690,044	$12,465,109
Georgia	$93,581,148	$1,944,579	$91,096,395	$540,175
Hawaii	$14,505,500	$638,242	$11,836,488	$2,030,770
Idaho	$14,452,536	$351,473	$13,594,462	$506,601
Illinois	$158,612,893	$6,633,232	$120,898,718	$31,080,943
Indiana	$30,932,604	$1,481,478	$19,833,376	$9,617,750
Iowa	$31,377,203	$768,225	$26,856,771	$3,752,207
Kansas	$18,291,114	$209,701	$15,964,937	$2,116,476
Kentucky	$29,934,926	$1,262,354	$26,894,974	$1,777,598
Louisiana	$46,019,184	$2,401,542	$37,562,341	$6,055,301
Maine	$12,768,657	$72,969	$10,637,714	$2,057,974
Maryland	$65,916,354	$2,128,521	$61,780,589	$2,007,244
Massachusetts	$74,458,401	$1,603,736	$57,806,783	$15,047,882
Michigan	$82,779,392	$4,137,790	$72,593,282	$6,048,321
Minnesota	$65,195,503	$1,328,640	$58,758,850	$5,108,013
Mississippi	$28,363,655	$1,338,969	$23,201,929	$3,822,757
Missouri	$72,371,692	$3,877,135	$56,595,843	$11,898,714
Montana	$10,128,898	$209,618	$9,354,860	$564,420
Nebraska	$15,734,220	$331,825	$7,066,264	$8,336,131
Nevada	$34,516,292	$264,496	$32,797,493	$1,454,303
New Hampshire	$7,758,843	$110,898	$6,903,966	$743,979
New Jersey	$79,659,554	$16,126	$53,781,084	$25,862,344
New Mexico	$25,755,515	$1,081,577	$22,753,723	$1,920,215
New York	$467,409,311	$15,688,579	$400,549,418	$51,171,314
North Carolina	$89,105,827	$1,321,340	$65,829,941	$21,954,545
North Dakota	$4,922,057	$119,269	$3,822,535	$980,253
Ohio	$181,865,502	$5,858,491	$141,161,847	$34,845,164
Oklahoma	$30,936,744	$842,958	$28,435,116	$1,658,670
Oregon	$73,348,754	$3,218,618	$62,255,034	$7,875,102
Pennsylvania	$102,821,065	$7,969,959	$80,877,398	$13,973,708
Rhode Island	$9,212,875	$284,440	$8,204,392	$724,043
South Carolina	$29,999,200	$3,452,919	$20,807,852	$5,738,429
South Dakota	$11,284,918	$835,045	$9,145,947	$1,303,926
Tennessee	$53,556,780	$3,899,385	$46,295,041	$3,362,354
Texas	$234,177,213	$8,470,210	$199,169,217	$26,537,787
Utah	$27,107,869	$1,581,487	$13,932,332	$11,594,050
Vermont	$3,962,339	$132,521	$2,703,266	$1,126,552
Virginia	$81,351,587	$1,218,674	$68,268,962	$11,863,951
Washington	$79,578,888	$231,978	$63,821,501	$15,525,408
West Virginia	$14,226,560	$205,029	$11,866,498	$2,155,033
Wisconsin	$103,155,924	$3,275,384	$97,708,174	$2,172,366
Wyoming	$7,698,436	$461,395	$5,780,505	$1,456,536
United States	$3,810,696,738	$135,831,243	$3,184,050,622	$490,814,876
Source: United States Census Bureau

Plan types

There are three primary types of public pension plans: defined benefit plans, defined contribution plans, and hybrid plans.

Defined benefit plans

Defined benefit plans provide a guaranteed lifetime retirement benefit based on an employee's years of service and salary. Benefit amounts, which are calculated differently from state to state, are determined by using a ﬁxed multiplier that is set out by the plan. Although most statewide plans require employee contributions, the retiree's benefit is not tied directly to his orher contribution amount. The majority of public pension plans are defined benefit plans.^[6]

Defined contribution plans

In contrast, in defined contribution plans, both employers and employees contribute to the employee account. Then, the employee determines how the contributions are invested, usually selecting from options presented by the plan administrator. At retirement, the amount of money in the fund is the basis of the employee's retirement benefit. The sponsoring public entity does not ensure a particular benefit amount, and usually does not provide post-retirement benefit cost of living increases.^[6]

Hybrid plans

Cash balance plans are a kind of hybrid plan and, like defined contribution plans, they provide each member with an individual account to which, in the public sector, both employees and employers make contributions. Funds in the members’ accounts are pooled for investment purposes, members’ balances are guaranteed, and members are guaranteed an annual rate of return.^[7]

Under another kind of hybrid plan members eligible for both a defined benefit and a defined contribution plan. In Indiana, for example, both components are mandatory. Employer contributions finance the defined benefit annuity, and employee contributions accumulate in an individual retirement account (which comprises the defined contribution part of the plan). ^[7]

Pension health

See also: Public pension health by state

Pension health is a term used to describe the overall state of a pension system. It can be difficult to gauge pension health in each state; studies use a variety of calculations to determine a pension system's average liabilities, unfunded liabilities, funded ratio, and other metrics. The information on this page comes from three reports by three separate organizations: the Pew Charitable Trusts, Morningstar, and State Budget Solutions.

HIGHLIGHTS
According to the Pew Charitable Trusts, “The nation's state-run retirement systems had a $934 billion gap in fiscal year 2014 between the pension benefits that governments have promised their workers and the funding available to meet those obligations.”
The investment research firm Morningstar found a $1.2 trillion gap in 2012 for the largest 100 U.S. public pension plans.
State Budget Solutions, assuming a lower rate of return, concluded that "state public pension plans [were] underfunded by $4.7 trillion [in 2013], up from $4.1 trillion in 2012

External links

United States Census Bureau, "State and Locally-Administered Defined Benefit Pension Systems - All Data by State and Level of Government: 2015"

Footnotes

v • e Pension policy

Pension background	Public pension eligibility • Public pension disclosure • State government pension liabilities • Local government public pensions • Public pension crisis • Public employee benefits • State budgets • Cost of living adjustment • Rate of return • Pension system • Defined Benefit Plan • Defined Contribution Plan • Public pension health by state

Local pension measures	Pension measure articles • Pension Hotspots Report • Original case study on San Jose and San Diego pensions

State public pension systems	Alabama • Alaska • Arizona • Arkansas • California • Colorado • Connecticut • Delaware • Florida • Georgia • Hawaii • Idaho • Illinois • Indiana • Iowa • Kansas • Kentucky • Louisiana • Maine • Maryland • Massachusetts • Michigan • Minnesota • Mississippi • Missouri • Montana • Nebraska • Nevada • New Hampshire • New Jersey • New Mexico • New York • North Carolina • North Dakota • Ohio • Oklahoma • Oregon • Pennsylvania • Rhode Island • South Carolina • South Dakota • Tennessee • Texas • Utah • Vermont • Virginia • Washington • West Virginia • Wisconsin • Wyoming

Pension terms and definitions	Cost of living adjustment • Defined Contribution Plan • Defined Benefit Plan • Employee and employer contributions • Rate of return • Liabilities and assets • Pension fund • Pension spiking • Unfunded liabilities