Market-valued unfunded public pension liabilities make up more than half of all state debt, accounting for $2.8 trillion of the total. These market-valued pension liabilities provide a realistic view of the money owed to public pension systems as a result of years of skipped payments, borrowed funds and inaccurate discount rate assumptions, the report contends.
The latest traditionally calculated figures total only $760 billion in unfunded pension liabilities. “Total state debt using these figures is still over $2 trillion, but a comprehensive view of state debt without accurately assessed public pension liabilities disguises the problem,” the report said.
States and other sources have not yet released market value pension liability figures for fiscal year 2011, so this year's report uses the same market-valued pension liability figures first published in 2010 and used in the previous year's report. Even so, growth in traditionally calculated unfunded pension liability totals indicates that if updated numbers were available, aggregate state debt would have continued to increase.