Missouri’s Public Pensions: Worse Than They Appear

The unfunded liabilities of the state’s public pensions are an economic ticking time bomb, which the state is obligated to honor. By incorrectly assessing the risk of not being able to meet future liabilities, these pensions significantly underestimate the amount of additional funding they need in order to be financially secure. A new policy study for the Show-Me Institute shows that if these public employee pensions use a more appropriate discount rate, they pose a real threat to the state’s finances. If left unaddressed, the state faces a significant risk and policymakers will be forced to make drastic cuts to services or significantly raise taxes in order to meet the liabilities. The risk posed to Missourians’ quality of life is a real and serious one. The study estimates that the liability equals nearly $9,000 for every Missourian.