Economics - General Employee Benefits

Pension Obligations by State

Detroit recently declared bankruptcy. But it may not be the last state or municipal government to do so.  Many states are not fully funding their pension obligations to state workers.  How much money do state residents need to contribute to fully fund their state’s pension obligation?

According to a study by Novy Marx and Rauh, fully funding state pension liabilities represents a tax on each household increase of $1,385 per household per year, around half of which goes to pay down legacy liabilities while half funds the cost of new promises. Below is a map describing how this obligations vary by state.


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