2024 Public Pension Solvency and Performance Report

Reason Foundation

This webinar discusses the Pension Integrity Project's 2024 Pension Solvency and Performance Report findings and the most pressing issues facing state and local pension systems, taxpayers, and public workers. The public pension study highlights several critical trends:

• Overly optimistic investment return assumptions: Since 2000, 99% of public pension funds have failed to meet their average assumed rates of return (ARRs), and 85% of public pension systems’ average returns fail to meet their current ARRs.

• Chronic investment underperformance: 99.5% of public pension funds underperformed the S&P 500 over the past 23 years, and 60% underperformed a simple 60/40 equity-fixed income portfolio. 

• Taxpayers’ costs rise: Employer—taxpayer—contributions have increased steadily, primarily to cover amortization costs—the expense of paying down pension debt —which now surpass the costs of funding current pension benefits (normal costs) nationally. 

• Trends in the distribution of pension debt: The two most pension-indebted states, Illinois and New Jersey, hold nearly 43% of all state-level pension debt while accounting for just 6.6% of the U.S. population.

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