Largest Unfunded Pension Liabilities
Plans with the biggest gap between promised benefits and current assets.
Why this ranking matters
US public pension systems collectively oversee retirement promises for more than 14 million active workers and 12 million retirees across state, city, county, and special-district plans. The aggregate unfunded liability across the 197 plans tracked in the Public Plans Database sits in the trillions of dollars — a fiscal exposure that influences state credit ratings, municipal borrowing costs, and the tax burden on residents over multi-decade horizons. Rankings like this one give policymakers, journalists, plan participants, and bond analysts a fast read on which systems are pulling ahead and which are slipping further into structural underfunding.
How to read the numbers
Funded ratio is the share of accrued liabilities currently backed by plan assets; 80 percent is the benchmark most actuarial standards consider healthy, while ratios under 60 percent indicate severe underfunding. Annual Required Contribution (ARC) coverage measures the percentage of the actuarially recommended annual payment that the sponsoring government actually makes — chronic underpayment is the single most common driver of widening unfunded liabilities. Five-year investment returns capture portfolio performance net of fees, smoothed across market cycles to dampen single-year noise. Each metric tells a different story: a plan can have strong returns but poor ARC coverage, or excellent ARC discipline but a legacy underfunding gap that takes decades to close.
What drives plan health
Three factors dominate long-run funded-ratio trajectories: (1) actuarial assumptions, particularly the assumed rate of return and mortality tables; (2) contribution discipline, including whether the sponsoring employer pays the full ARC every year; and (3) benefit design, including cost-of-living adjustments, retirement age, and whether new hires are placed into less generous tiers. Plans that have closed defined-benefit accruals to new employees and shifted them to defined-contribution or hybrid designs are gradually reducing future liability growth, though the existing unfunded liability remains for the legacy workforce. Investment performance matters but cannot independently rescue a chronically underfunded plan — the math of compound underpayment eventually overwhelms even strong portfolio returns.
Comparing across states
State-to-state comparisons require care. A plan reporting an 85 percent funded ratio on a 7.0 percent assumed return is not directly comparable to one reporting 85 percent on a 7.5 percent assumption — the lower-discount-rate plan is implicitly using more conservative liability measures. Fiscal-year-end dates also vary (June 30, July 1, September 30, December 31), introducing timing mismatches when market returns swing sharply between cutoffs. The Public Plans Database standardizes wherever it can but underlying actuarial choices remain plan-specific. Cross-reference the methodology notes on each plan profile before drawing direct head-to-head conclusions.
What to look at next
For deeper context, browse the state-level overviews to see how plans within the same fiscal jurisdiction cluster, or review the plan-type rankings to compare teacher systems, general-employee systems, and public-safety plans on equivalent footing. The methodology page documents exactly which series are ingested, how grades are assigned, and how cross-plan comparability is handled. For pension-policy news and academic analysis, the Public Plans Database at the Center for Retirement Research at Boston College, the National Association of State Retirement Administrators, and the Center for Retirement Research are the canonical primary sources.
Frequently asked questions
Is a higher funded ratio always better? Generally yes, but a ratio above 100 percent calculated under aggressive assumptions can mask underlying weakness — actuarial choices matter. Look at the discount rate and asset-smoothing method alongside the headline number.
Why do some plans rank well on returns but poorly on funded status? Investment returns are only one of four levers (contributions, benefit accruals, demographic changes, returns). A plan with strong returns but persistent underfunding usually reflects either chronic ARC shortfalls in past decades or a benefit-design legacy that newer hires no longer accrue toward.
How often does this data update? Most plans publish a comprehensive annual financial report and an actuarial valuation each fiscal year. The Public Plans Database ingests these as they are released, so the reporting year on each plan profile reflects the most recently audited disclosures available at last ingest.
Who maintains the underlying data? The Public Plans Database is a joint project of the Center for Retirement Research at Boston College, the Center for State and Local Government Excellence at MissionSquare Research Institute, and the National Association of State Retirement Administrators. PlainPension ingests, normalizes, and links — we do not modify the underlying figures.
Limitations of this ranking
Rankings of this kind compress a multidimensional picture into a single ordering. A plan's overall fiscal position depends on assumptions, contribution policy, demographic trends, investment strategy, and benefit design — none of which collapses neatly into one number. Use this list as a starting point for further reading, not as a final verdict. The most fiscally consequential decisions a plan, sponsor, or beneficiary makes will involve actuarial analysis that goes far beyond any single headline metric.