Florida is a national leader in saving up for its public-employee pension bill, according to a recent study by the Pew Center on the States. Even so, the state faces a $3.6 billion pension-funding shortfall.
Most states are in worse shape. Roughly half the states have underfunded pensions, which constitute the bulk of the nation’s retirement bill. Some may have to choose between honoring their pension obligations and funding other state programs, as has already happened in New Jersey and West Virginia.
The 50 states together have to pay out more than $2.7 trillion to cover their pension obligations for the next 30 years.
Only six states are on track to fully fund retiree benefits: Arizona, North Dakota, Ohio, Oregon, Utah and Wisconsin. States that consistently have fallen behind include Colorado, Illinois, Kansas, Michigan, New Jersey, Oklahoma and Washington.
Unlike companies, state and local governments are not subject to federal pension laws, which set uniform funding standards.