Hidden Hinderburgs: Corporate Pension Funding Gap Is $403 Billion, US Public Pensions Funding Gap Is $3.4 Trillion

Who has the worst pension funding gap? The US private sector or US state and local governments?

In short, the answer is state and local government by a considerable amount. And taxpayers will eventually be made to pay.

(Bloomberg) — Companies are contributing to a $78 trillion gap in pension funding for a group of 20 countries, according to a Citigroup Inc. report published Tuesday. Corporate pension-plan assets only covered 82 percent of projected benefits as of last year, based on data cited in the research. Their funding status failed to rebound in the past seven years even though the Standard & Poor’s 500 Index more than doubled, as shown in the chart.


S&P 500 companies faced pension deficits of $403 billion at the end of 2015.

As for government pensions, U.S. public pension systems were actually running at a $3.4 trillion shortfall in fiscal 2014 when “optimistic assumptions about future investment returns” contained in government disclosures were tempered.

Here is the Joshua Rauh study on State and Local pension funds:

Illinois has a huge shortfall of State Net Pension Liability (2014) and the Market Value of the Unfunded Liability and has the largest Multiple of Estimated 2014 Revenue.


Nevada is the big loser in terms of what is Required to Prevent Rise in Unfunded Liability under MVL (Market Value of Liability). Illinois comes in second.


I wonder which political candidate will have the courage to mention how they are going to fix ANY of the pension shortfalls?


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