The Widening Gap

The Great Recession's Impact on State Pension and Retiree Health Care Costs

The Widening Gap
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Quick Summary

Please see our updated Widening Gap report  for the latest state retiree benefits data.

The gap between the promises states have made for public employees’ retirement benefits and the money set aside to pay for them grew to at least $1.26 trillion in fiscal year 2009—a 26 percent increase in one year—according to a Pew report.


The Widening Gap: The Great Recession’s Impact on State Pension and Retiree Health Care Costs analyzes 2009 data on states' funding of pensions and retiree health care. The report shows how states’ retirement systems—many of them already on shaky ground—were affected by the Great Recession:

The Widening Gap is a follow-up study to Pew's 2010 report, The Trillion Dollar Gap. It covers pension, health care and other benefits promised to current and future retirees.

  • Pension funding shortfalls accounted for $660 billion of the $1.26 trillion gap, and unfunded retiree health care costs accounted for the remaining $607 billion.

  • States had only about $31 billion, or 5 percent, saved toward their obligations for retiree health care benefits.

  • State pension plans were 78 percent funded, declining from 84 percent in 2008.

Report Assets

PEW_Huh_230x130_km_OWN Expert
Pew Expert: Kil Huh

Kil Huh is director of the States’ Fiscal Health Project. 

PEW_Urahn_230x130_km_OWN Video
State Pension Costs

Watch Sue Urahn, managing director for the Pew Center on the States, discuss the scope of the pension and retiree health benefit problem.

April 25, 2011
Brian Keegan | 202.540.6677
Public Sector Retirement Systems
Pensions, Retiree Health Care, Retiree Health Care Costs