North Carolina is one of only a handful of states with a fully funded pension, according to a recent study by the Pew Center on the States, although the state’s obligations for retiree health care and other benefits is underfunded by $139 million.
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 already has happened in New Jersey and West Virginia.
The 50 states together will 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.
The full report and 50 state fact sheets are available online at www.pewcenteronthestates.org.