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How Secure Public Pensions Are in Minnesota

imageForEntry42 bHXPublic 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 Minnesota, pension liabilities totaled an estimated $88.3 billion in 2020. Meanwhile, the state’s pension assets totaled $71.2 billion. Considering both assets and liabilities, Minnesota’s pension funding ratio is 80.7%, the 15th highest in the country.

According to 2021 estimates from the Bureau of Labor Statistics, the Minnesota state government employs some 97,600 people, or 3.4% 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
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