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Ranked: States With the Strongest Public Pensions in 2025

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Ranked: States With the Strongest Public Pensions in 2025

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Key Takeaways

  • The funded ratio compares a pension plan’s assets to its liabilities, showing how prepared each state is to meet its future retirement promises.
  • A higher funded ratio means a pension plan has more assets set aside to cover future benefits, making it more financially secure.

Public pension health varies widely across the U.S., and 2025 estimates shows a clear divide between states with strong fiscal management and those still struggling to meet retirement promises.

In this visualization, we rank all 50 states (and D.C.) by the average funded ratio of their local pension plans, which measures how much of their pension obligations are backed by assets.

Data & Discussion

The data for this visualization comes from Equable.

A funded ratio of 100% means a state can fully meet its future pension obligations, while lower ratios indicate potential fiscal challenges that may require increased contributions or benefit adjustments. Pensions with less than 60% funding are classified as “distressed”.

State Percentage Range
Illinois Less than 60%
Kentucky Less than 60%
Mississippi Less than 60%
New Jersey Less than 60%
Connecticut 60% - 70%
Hawaii 60% - 70%
New Mexico 60% - 70%
South Carolina 60% - 70%
Alabama 70% - 80%
Alaska 70% - 80%
Arizona 70% - 80%
Colorado 70% - 80%
Maryland 70% - 80%
Massachusetts 70% - 80%
Montana 70% - 80%
New Hampshire 70% - 80%
North Dakota 70% - 80%
Pennsylvania 70% - 80%
Rhode Island 70% - 80%
Vermont 70% - 80%
Arkansas 80% - 90%
California 80% - 90%
Florida 80% - 90%
Georgia 80% - 90%
Indiana 80% - 90%
Kansas 80% - 90%
Louisiana 80% - 90%
Maine 80% - 90%
Michigan 80% - 90%
Missouri 80% - 90%
Nevada 80% - 90%
North Carolina 80% - 90%
Ohio 80% - 90%
Oklahoma 80% - 90%
Oregon 80% - 90%
Texas 80% - 90%
Virginia 80% - 90%
Wyoming 80% - 90%
DC 90% - 100%
Delaware 90% - 100%
Idaho 90% - 100%
Iowa 90% - 100%
Minnesota 90% - 100%
Nebraska 90% - 100%
New York 90% - 100%
South Dakota 90% - 100%
Tennessee 90% - 100%
Utah 90% - 100%
Washington 90% - 100%
West Virginia 90% - 100%
Wisconsin 90% - 100%

States in Distressed Status

Based on 2025 estimates, four states remain in a distressed status with less than 60% funding: New Jersey, Illinois, Kentucky, and Mississippi.

According to some sources, New Jersey’s pensions have the lowest funded ratios in America due to several factors:

  • Failure to make required payments: The state has regularly fallen behind on making required payments into the system
  • Benefit increases: Past administrations have increased benefits without establishing a concrete plan to fund them
  • Use of borrowing: Pensions have borrowed money to pay for their obligations, creating an additional debt burden

Illinois is also in a dire situation, with Chicago pensions growing their unfunded liabilities from $11 billion in 2001, to $56 billion in 2024.

The Top Three Causes of Unfunded Liabilities

According to Equable, the three primary reasons pensions are falling behind are assumption changes, investment experience, and interest on debt.

Managing pension plans requires a wide range of assumptions about future events: investment returns, mortality rates, workforce turnover, salary growth, inflation, government contributions, and more. There are lots of places where reality may not line up with actuarial expectations.
State of Pensions 2025

For example, in 2023, America’s public pension plans faced a collective $1.3 trillion in unfunded liabilities. Of this amount, 36% was due to “assumption changes”, which refers to adjustments in key actuarial assumptions.

When metrics like life expectancy rise, pension plans must pay their retirees benefits for longer than originally expected.

The second major reason, “investment experience”, accounts for 29% of the $1.3 trillion shortfall. Pension plans have faced high investment return volatility since the Global Financial Crisis, making it difficult to manage cash flows.

Finally, the third major reason is “interest on debt”, representing 22% of the shortfall. Equable reports that America’s public pensions have been underfunded for nearly two decades, and interest payments on debt are growing faster than the member contributions they collect.

Learn More on the Voronoi App

If you enjoyed today’s post, check out Which States Have the Highest Share of Retirement-Age Workers? on Voronoi, the new app from Visual Capitalist.