Special Report

Wisconsin Has the Most Secure Public Pensions in the Nation

Douglas A. McIntyre

Published: February 6, 2023 1:11 pm

Pensions are often a major consideration when people take public service jobs. Someone who makes $50,000 annually might get pension benefits of $20,000 a year when they retire. One of the major problems with public pension funds, however, is that they are not always properly funded, putting these benefits at risk. Among all the states, Wisconsin has the most secure pension funds. (Also see, what America’s governors are paid in every state.)

In contrast to private sector 401(k) retirement plans, pensions promise a specified monthly income to retirees for the rest of their life. Under this system, the burden of risk falls on the employer – state governments in the case of state workers such as firefighters, police officers, and teachers, who often rely on pensions for retirement.

The most recent state-level data from Pew Charitable Trusts shows that Wisconsin’s pension system is actually overfunded. The state had enough funds to cover 105.3% of its pension obligations in 2020. The state’s pension assets that year totaled $125.0 billion, while its pension liabilities totaled $118.7 billion. About 91,500 employees worked for Wisconsin’s state government as of 2021, or 3.2% of the state’s workforce, according to the  Bureau of Labor Statistics. (See where Wisconsin ranks in the best and worst state economies according to a new prosperity index.)

Of course, not all states have well-funded pension systems. In five states, only 50% or less of pension liabilities are funded, and 29 states have less than 75% of pension liabilities funded. 

After financial markets surged in fiscal 2021 and the gap between pension liabilities and assets nationwide narrowed somewhat, state pension funds took a beating in 2022. A weakening economy, inflation, and the Federal Reserve raising rates have contributed to a rough stock market that has eaten away at pension assets, according to Politico.

See 24/7 Wall St.’s list of how secure public pensions are in every state.