Source: Truth in Accounting
Latest Data: 2022
Release Timing: Following Year
Frequency: Annual
Contact: Sheila Weinberg, 847-835-5200, sweinberg@truthinaccounting.org

Unfunded pension benefits represents the total amount of pension liabilities for which the government does not have assets to pay benefits. It is calculated by summing the "net pension liabilities" and "net pension assets" of every plan for which the government is responsible, taking into account their share of multiple employer plans. This data is collected from each state's Annual Comprehensive Financial Report, as well as pension plan financial and actuarial reports.

Pension liabilities are determined through a calculation known as "discounting," which converts the future value of benefit payments into present-day dollars. The size of the present value of the liability depends heavily on the 'discount rate,' which is the interest rate that is assumed in the cost to fund the benefit payments.