Yep, you read the number right — five trillion dollars. Evidently, somebody is asking the “Pension Pirates” to be more accountable…
If the Actuarial Standards Board enacts recommendations from its Pension Task Force, actuarial valuations for state and local government pensions will report unfunded liabilities of over $5 trillion and funding ratios of just 39 percent. The public pensions industry will hate it, but those figures are the best available measures of the costs of public employee retirement plans.
A Pension Task Force established by the Actuarial Standards Board has recommended rules changes that would require all pension actuaries to calculate and disclose the “market value” of retirement plan liabilities, a step that has been fought hard by the public pensions industry. Proponents of market-value liability figures, which include most economists as well as many policy analysts concerned about pension funding, argue that current actuarial methods understate pensions’ true benefit liabilities and encourage pensions to take excessive investment risk.
Source: Are State and Local Government Pensions Underfunded by $5 Trillion?