Distribution of Pension Debt
This section breaks down how pension debt is allocated throughout the country from governmental entities' perspective, part of the Reason Foundation's Government Financial Transparency Project.
Key Findings
Government Debt Context
- Total net pension liability: State and local governments report $1,539 billion in total net pension liabilities.
- State governments: Hold the largest share at 43.1% ($664 billion).
- Local governments: Combined, counties, municipalities, and school districts hold 56.9% of the net pension liability.
Distribution by Government Level
- State governments: 43.1% ($664 billion in net pension liability)
- Counties: 11.8% ($181 billion in net pension liability)
- Municipalities: 19.4% ($298 billion - cities, towns, other incorporated governments)
- School Districts: 25.7% ($396 billion in net pension liability)
Distribution of Total Net Pension Liability by Government Level
Figure 19: National Breakdown of Total Net Pension Liability Across State, City, County, and School District Levels
Figure 19 shows how the total net pension liability is divided among different levels of government.
States bear the largest share of this liability, accounting for 43.1% ($664 billion) of the total. School districts hold 25.7% ($396 billion), municipalities (cities, towns, and other incorporated governments) account for 19.4% ($298 billion), while counties hold 11.8% ($181 billion).
While state governments clearly hold the largest share of unfunded pension liabilities, the relative burden on local entities is often heavier. Compared to state governments, municipalities, school districts, and counties typically have more elastic (price-sensitive) revenue bases and more limited fiscal flexibility. They also often have little influence over pension benefit design or contribution policy, which are generally set at the state level.
Note: All figures are based on FY 2023 data reported by government entities, the most recent year for which comprehensive filings are available. By contrast, the Funding Health section uses FY 2024 data reported by pension plans. Because pension liabilities are sensitive to market performance and discount rate assumptions, the values reported by governments and by plans can diverge significantly—explaining the discrepancies between this section and the rest of the report.