In July 2022, Reason Foundation’s Pension Integrity Project estimated that market performance would cause most public pension systems to report investment losses on average -6% for the year, causing the aggregate unfunded liabilities of state pension systems to rise to around $1.3 trillion in 2022, up from $783 billion in unfunded liabilities in 2021. Such a large growth in public pension debt has a major impact on annual costs, government budgets and taxpayers.
While a one-year negative investment return should not be the basis for making long-term funding policy decisions, it does provide an opportunity to ask the fundamental question:
