Region Focus

Third Quarter 2010

Fuzzy Math: Public pensions are underfunded — how bad is it?

Millions of Americans rely on public pensions for retirement, but the funding status of many plans took a big hit during the recession. Some observers worry that public pensions will prove to be a major economic problem, while others say the issue will largely resolve itself as the economy recovers.

Read Article

Related Links

Aubry, Jean-Pierre, Alicia Munnell, and Laura Quinby. “Public Pension Funding Standards in Practice. ” Paper prepared for the National Bureau of Economic Research State and Local Pension Conference, Moran, Wyoming, August 2010.

Novy-Marx, Robert, and Joshua Rauh. “The Liabilities and Risks of State-Sponsored Pension Plans.” Journal of Economic Perspectives, Fall 2009, vol. 23, no. 4, pp. 191-210.

Rauh, Joshua. “Are State Public Pensions Sustainable? Why the Federal Government Should Worry About State Pension Liabilities.” National Tax Journal, September 2010, vol. 63, no. 3, pp. 585-601.
Earlier version prepared for "Train Wreck: A Conference on America's Looming Fiscal Crisis," held at the University of Southern California on Jan. 15, 2010.

"The Trillion Dollar Gap: Underfunded State Retirement Systems and the Roads to Reform." Washington, D.C.: The Pew Center on the States, February 2010. Full report available from the Pew Center Web site.

Contact Us


Aaron Steelman
Publications Director
(804) 697-2658

Order Publications

Order single copies of or subscribe to Econ Focus (formerly Region Focus) and other publications from the Federal Reserve System.