ALEC Has It At $5.6 Trillion

The American Legislative Exchange Council (ALEC) came out with a report this week based on reviewing the latest available actuarial valuations of over 280 state-administered pension plans and adjusting the discount rate from an average of 7.37% to a ‘riskless’ rate of of 2.344%.

I disagree with the methodology since I believe the funded status of a particular plan should be considered when adjusting the wishful discount rates that the plan actuaries who politicians hire are ‘encouraged’ to use.  That is, a plan closer to full funding should be able to use a rate closer to that 7.37% while a pure pay-go plan (Puerto Rico) should use a rate closer to 0% since that is about what they are getting for the few days any money stays in the trust.

Nevertheless there were some nice charts ranking states by Funded Ratio, Unfunded Liabilities, and Unfunded Liabilities Per Capita.  However, I did not see where they had the underlying data so, based on those charts, I decided to extract some other numbers.

Here is the spreadsheet sorted by state and totaled which yields:

  • Total Accrued Liabilities: $8.6 trillion
  • Total Assets: $3 trillion
  • Unfunded Liabilities: $5.6 trillion
  • Average Funded Ratio: 35.1%
  • Average Unfunded Per Capita: $17,427
  • US Population: 321 million


24 responses to this post.

  1. Posted by Anonymous on October 14, 2016 at 11:12 pm

    Here we go again!

    Anonymous onOctober 12, 2016 at 10:34 am

    DCP for ALL – Local, State, & Federal – civilian, law enforcement & military. If it doesn’t work for some then it doesn’t work for ALL. Or are you one of those exceptions folk? BTW, it has nothing to do with the Feds ability to print money!

    dentss dunnigan onOctober 12, 2016 at 12:48 pm

    the fed ability to print money notwithstanding ,the fed can borrow at the lowest interest rate possibly .01%( presently)where as states NJ must pay quite a premium presently at about 6.75% …but for comparison sake what job would you compair to a marine fighting in the middle east to a cop in Newark ..? inquiring minds want to know …but the bottom line is the gov can and will print money look at our debt it’s doubled in the last 8 years …

    Anonymous onOctober 12, 2016 at 1:39 pm

    Ok but what ℅ of military is front line combat versus support staff here and abroad. In some cases military is in more harms way but in alot of ways their in less harms way then, in your example, the cop in Newark. So now what?

    Anonymous onOctober 12, 2016 at 1:41 pm

    And DD, I’m assuming your quick defense of the military means you and/or yours have a vested interest. Like I said, change is good so long as it doesn’t negatively impact who?

    dentss dunnigan onOctober 12, 2016 at 4:11 pm

    I have great respect for our men in Arms ,but I do find your jeliously of their benefits offensive …I will not comment on this subject further

    Anonymous onOctober 12, 2016 at 8:33 pm

    I as well respect our military and first responders but if it’s about jealousy, as you put it, then who’s jealousy of who? I always thought it was about the numbers so don’t make it appear so personal and untouchable. Self interest is a double edge sword!

    Anonymous onOctober 13, 2016 at 3:34 pm

    Just remember whether it’s Washington or Trenton, military, first responders, or civilians – individuals chose to accept employment based on the salary and benefits being offered. The fact that one level of government can “print money” (which we all know has negative economic consequences) and another can’t shouldn’t preclude the moral and, if not for CC’s NJSC, legal obligation to fulfill their commitments.


  2. Posted by Anonymous on October 14, 2016 at 11:52 pm

    And what does ALEC have to say of the Feds #s?


  3. Posted by Anonymous on October 15, 2016 at 10:49 am

    History will repeat itself, if allowed! Memories are short but think back to Christie v Corzine, the now Gov’s “promise” to teachers and first responders – your P&B are “safe” with me. Well fast forward and need I say more. IF Federal including Military workers think for one second some how what happens at the State and Local level won’t impact them eventually? Well then it’s like I said, history will repeat itself. BTW, the ability to print money won’t be the issue but time will tell.


  4. Posted by Anonymous on October 15, 2016 at 12:07 pm

    Sorry T Rump got the best of me, let’s make America great again – just like him….


  5. Posted by Anonymous on October 15, 2016 at 7:38 pm

    Wonder why Fed pensions aren’t discussed, State & Local already a big nut to crack OR can’t think of going after the “Untouchables”. What a great show, don’t mess with Ness!


  6. Posted by TB on October 17, 2016 at 2:19 pm

    More and more people are beginning to realize that Defined Benefit plans like public pensions are not sustainable, including the private sector which has more or less done away with them. Here is my solution to this looming crisis that is only going to get worse without any correction of course:

    Please help spread the word…


    • Posted by Anonymous on October 17, 2016 at 2:26 pm

      Ok so just to be clear DBP for all, including Federal and military.


      • Posted by TB on October 17, 2016 at 2:47 pm

        If your “DBP” means defined benefit program, as in Social Security, I would say yes. Imagine the trillions of dollars of taxpayer contributions over the years to public pensions that now would flow into the Social Security Reserves. The other obvious benefit would be ridding all of these government agencies from the trillions and trillions of dollars of debt that will eventually force them to file bankruptcy. Furthermore, in my opinion it would be the fairest solution to this pending disaster that will destroy future generations.

        Do you agree?


        • Posted by Anonymous on October 17, 2016 at 4:04 pm

          Good evaious non specific, to my point of Federal including military, response. A simple yes or no, to Federal including military DBP, would suffice?


          • Posted by TB on October 17, 2016 at 4:34 pm

            YES – If you take all of the government unfunded liabilities including military pensions, social security, medicare, etc. the number is in the 100’s of trillions of dollars. How on earth do you propose to pay for that? In the face of a total financial collapse of this country, it is only fair to have everyone on the same DB plan (i.e. Social Security), wouldn’t you agree?

            I’m sorry, but eventually the numbers will force us to do something like I propose.

          • Posted by Anonymous on October 17, 2016 at 4:41 pm

            Thank you for your pointed response. I’ll say this, to even consider what you’re proposing we’d need a, paid for, expansion (increase) in SS benefits with, for argument sake, a cap for the highest 1℅-2℅ of Americans? I’m sure you’re aware not many people are able to survive on just SS today.

          • Posted by S Moderation Douglas on October 19, 2016 at 2:05 am

            ” 100’s of trillions of dollars.” ?

            That sounds like Tough Love math. What do you know that Moody ‘ s doesn’t?

          • Posted by TB on October 19, 2016 at 2:32 am

            $222 trillion to be exact, and that figure is from 2012 – do you believe it has gotten better! And oh yeah, that doesn’t even include unfunded liabilities from all the federal, state, and local pensions. Anyone who isn’t scared to death by these numbers is just not living in reality.

            See report:

          • Posted by Anonymous on October 19, 2016 at 9:21 am

            Legit or obit?

          • Posted by S Moderation Douglas on October 19, 2016 at 11:09 am

            $222 trillion is not “all of the government unfunded liabilities.”

            It is the “the infinite-horizon fiscal gap.”

            And here are three solutions to the Social Security portion of that gap:

            “Grandfather in current Social Security beneficiaries (people who have already paid into the system). That is, pay them the Social Security benefits they’ve already earned over time. Finance these payments from Social Security Federal Insurance Contributions Act (FICA) tax proceeds, which will be expanded under my tax plan by eliminating the ceiling on taxable payroll.”

            “Freeze the current Social Security system by filling zeros in workers’ earnings records for years after the reform begins. This means just consider the earnings records of workers during the year before the reform.”

            “Require all workers under 60 to contribute 10 percent of their wages to Personal Security Accounts (PSAs). This 10-percent compulsory personal saving contribution is in addition to the 12.4 percent FICA tax.”

            If that don’t work:


  7. Posted by dentss dunnigan on October 17, 2016 at 5:40 pm

    The only way out of all this is for New jersey to have it’s own currency .Being allowed to issue new money backed by nothing but our politicians promises is the best way possible to pay for debts they will most likely never able to .Just think of the possibilities


  8. […] American Legislative Exchange Council (ALEC) earlier this year came out with an estimate of $5.6 trillion as the the total of the unfunded liabilities in state pension plans and now they have come out with […]


  9. […] * Basically slight rewording with link and spreadsheet updates from a blog last year. […]


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