Funded Ratios

Just as the unfunded liability measures the shortfall between dollars in the pension fund and estimated value of promised lifetime income benefits, the “funded ratio” is a measurement of what percentage of necessary funds a pension has already saved.

A funded ratio above 100% means the plan has more than enough assets to cover the benefits it has promised to pay. A funded ratio below 100% means the plan has not saved enough.

A pension plan’s funded ratio can help you put pension debt into context quickly. For example, if a pension fund has promised $1 billion in benefits but only has $900 million in assets, then that pension has a funded ratio of 90%. The $100 million shortfall is a big number, but the pension plan is close to being healthy. By contrast, if a pension fund has promised $200 million in benefits and has $100 million in assets, then that pension has only a 50% funded ratio—and the $100 million shortfall is a bigger problem.

The funded ratio is also helpful for comparing between states. Both Georgia’s Teachers Retirement System and the neighboring South Carolina Retirement System have around $25 billion in pension debt, but South Carolina has a funded ratio around 50% while Georgia’s is roughly 75%. South Carolina is a smaller state, so that $25 billion in pension debt is a bigger problem for them than Georgia (though it is still a significant problem for the Peach State).

What is the funded ratio for your pension plan?

Select or search your state or plan below.

Funded Ratios

Note: This is the funded ratio in your retirement system’s most recent annual financial report. Some states report on a one or two year lag.