The markets giveth, and the markets taketh away. Unfunded liabilities for state pension funds are expected to climb from $783 billion in 2021 to $1.3 trillion in 2022. That would mean the funded ratio of state pensions would fall from 85 percent last year to 75 percent in 2022.
That's according to the Reason Foundation, which projects that after the market expansion of 2021 helped pensions, the rather lackluster performance of markets this year could see an average rate of decline in state pensions' assets of 6 percent. Should that be the case, the Reason Foundation estimates that some of the nation's largest pension funds—California, New York, Texas, Ohio, Florida, and Illinois—would see their unfunded pension liabilities jump by more than $20 billion compared with 2021.
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