A state pension plan’s annual funded ratio gives an end-of-fiscal-year snapshot of the assets as a proportion of the accrued liabilities. In aggregate, the funded ratio of these plans dropped to 72 percent in 2015 from 75 percent in 2014. Across the country, funded ratios for plans reviewed by The Pew Charitable Trusts ranged from 37 percent in New Jersey to 104 percent in South Dakota.
The underlying funding differences among pension plans and states reflect policy choices, including plan design, contribution policies, and investment return assumptions, in addition to pension fund performance in the stock market. Pew’s issue brief “The State Pension Funding Gap: 2015,” published in April 2017, outlines these differences in detail.