About half the states—including Indiana—have underfunded their retirement plans for public workers, according to Promises with a Price, a recent study by the Pew Center on the States. Indiana’s funding has been uneven in the past and stands at 64%, compared to the national average of 82%.
The state has one of the most underfunded teachers’ pensions in the nation, at 44% in 2006.
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 over 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 have consistently 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.
View the full report and 50 state fact sheets at www.pewcenteronthestates.org.