Tennessee Ranks 3rd Highest In Country For Public Pension Security

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By Samuel Stebbins, 24/7 Wall St. via The Center Square –

Public employee pension systems are some of the largest financial liabilities on state government balance sheets. The 50 states have over $4.5 trillion in cumulative pension liabilities combined, roughly double the amount all 50 states spent in fiscal 2020. For years, state pension systems were woefully underfunded in much of the country, but according to a recent report from the Pew Charitable Trusts, this trend may be reversing.

Driven by higher investment from both employees and employers, state pension systems have largely stabilized as of 2020. Since 2007, states across the country have more than doubled annual pension contributions, often cutting funding for other programs to do so.

Still, some states are better positioned to pay public sector employees in retirement than others. In Tennessee, pension liabilities totaled an estimated $42.7 billion in 2020. Meanwhile, the state’s pension assets totaled $41.9 billion. Considering both assets and liabilities, Tennessee’s pension funding ratio is 98.1%, the third highest in the country.

According to 2021 estimates from the Bureau of Labor Statistics, the Tennessee state government employs some 93,900 people, or 3.0% of the total private and public sector workforce in the state.

It is important to note that 2020 is the most recent year for which comprehensive state level data is available and that the recent market downturn has all but erased much of the financial gains states have made in recent years. Still, while markets are always susceptible to turmoil, improved policies have gone a long way to improving pension funding in much of the country.

All state pension data in this story was compiled by the Pew Charitable Trusts using comprehensive annual financial reports from each state.

Rank	State	Pension funding ratio (%)	Total pension liabilities ($B)	Total pension assets ($B)	State gov. employment as share of workforce (%)
50	Wisconsin	105.3	118.7	125.0	3.2
49	South Dakota	100.0	12.3	12.3	4.0
48	Tennessee	98.1	42.7	41.9	3.0
47	Utah	96.6	40.4	39.0	5.0
46	Washington	95.1	110.6	105.1	4.2
45	Nebraska	91.8	17.0	15.6	4.2
44	Idaho	89.1	20.1	17.9	3.7
43	North Carolina	86.7	119.0	103.2	4.4
42	New York	86.2	229.9	198.1	2.7
41	Delaware	85.2	12.7	10.8	7.2
40	Iowa	82.9	42.1	34.9	4.3
39	Maine	82.5	18.4	15.1	3.9
38	Ohio	81.7	213.3	174.2	3.1
37	West Virginia	80.8	19.6	15.9	6.7
36	Minnesota	80.7	88.3	71.2	3.4
35	Wyoming	78.6	12.3	9.6	5.1
34	Georgia	77.3	126.8	97.9	3.4
33	Nevada	77.0	60.7	46.7	2.9
32	Oregon	75.8	90.1	68.3	2.3
31	Missouri	75.4	79.5	59.9	3.5
30	Arkansas	75.3	36.8	27.7	6.0
29	Florida	74.5	217.5	161.9	2.7
28	Virginia	74.4	106.7	79.4	3.9
27	Oklahoma	73.5	45.1	33.2	4.9
26	California	71.8	689.9	495.5	3.2
25	Maryland	69.9	78.6	54.9	4.2
24	Colorado	69.5	83.9	58.3	4.5
23	Indiana	69.0	45.0	31.1	3.6
22	Texas	67.5	288.7	194.9	3.3
21	Alabama	67.4	58.5	39.4	5.9
20	Montana	67.3	17.5	11.8	5.6
19	Kansas	66.3	31.1	20.6	3.6
18	Alaska	65.6	23.1	15.1	7.3
17	Louisiana	63.2	55.9	35.4	4.6
16	Arizona	61.9	80.2	49.6	3.0
15	Michigan	60.4	108.2	65.4	4.1
14	Mississippi	59.1	47.8	28.2	5.0
13	New Hampshire	58.8	15.6	9.2	3.4
12	Pennsylvania	58.5	160.0	93.6	2.5
11	Vermont	58.4	8.0	4.7	5.9
10	Massachusetts	55.9	103.6	57.9	3.4
9	North Dakota	55.4	10.8	6.0	5.3
8	Rhode Island	54.2	12.1	6.6	4.0
7	Hawaii	53.2	32.7	17.4	11.5
6	South Carolina	51.7	60.4	31.3	5.0
5	New Mexico	50.0	55.8	27.9	6.6
4	Kentucky	44.6	54.8	24.4	4.7
3	Connecticut	42.6	74.6	31.8	4.3
2	New Jersey	38.4	208.2	79.9	3.4
1	Illinois	37.5	246.2	92.3	2.5