Report Highlights PA’s Mounting Pension Debt, Grove Says
HARRISBURG – Pennsylvania has one of the highest unfunded pension liabilities in the nation, Rep. Seth Grove (R-Dover) said Thursday, citing a report released today by the American Legislative Exchange Council (ALEC).

Pennsylvania’s public pension plans are only 28.9 percent funded, the ninth worst funding ratio in the United States. The unfunded liability means Pennsylvania’s plans, which include municipal and state pensions, are underfunded by $211 billion. It would cost each man, woman and child living in Pennsylvania $16,527 to make up the difference, according to the report entitled “Unaccountable and Unaffordable 2016.”

“If you think the random clown sightings are scary, wait until you see this unfunded pension report,” Grove said. “The data laid out in this report is staggering and serves as a call for true pension reform to not only be discussed, but also be approved by the Legislature. Each day we do nothing, the greater the unfunded liability becomes.”

Pennsylvania isn’t alone in dealing with unfunded pension liabilities. States’ public pension plans across the nation are now underfunded by nearly $5.6 trillion, a $900 million increase from 2014, the last time ALEC published a pension report. The nationwide funding level is 35 percent. Across all states, the price tag for unfunded pension liabilities is $17,427 per capita.

“After so many years of kicking the can down the road, it should come as no surprise that Pennsylvania fares poorly in this year’s report,” said Jonathan Williams, vice president of the ALEC Center for State Fiscal Reform and co-author of the study. “The state’s funded ratio of just 28.9 percent is among the nation’s very worst. The unfunded liabilities represent a debt of $16,527 for every man, woman and child in Pennsylvania.”

The report considered three important metrics to gauge the severity of the pension problem across the 50 states: Unfunded pension liability per capita, the funded ratio and total unfunded pension liability. Unfunded pension liability per capita shows the personal share of liability for every resident in each state. The funded ratio represents how well a given state’s pension plans are funding their pension promises. Finally, the total unfunded pension liability reveals the fiscal strain on state budgets in raw dollar terms, the report states.

The true unfunded liability is often obscured by poor accounting methods. One accounting trick is the use of high discount rates, the assumed rate of future investment returns on fund assets, when pension liabilities are calculated. In addition to expecting unrealistic investment returns, many states and local governments fail to make their annually required contributions.

“Absent meaningful public pension reform, Pennsylvania’s budget is going under,” warned Bob Williams, a study co-author and senior fellow at State Budget Solutions, which is a project of the ALEC Center for State Fiscal Reform.

To read the full report and methodology, go to

Representative Seth Grove
196th District
Pennsylvania House of Representatives

Media Contact: Greg Gross
717.260.6374 /

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