About PensionRisk

Why combine private and public pension data

Public-sector pension plans and private corporate pension plans operate under different regulatory regimes — public plans under state oversight, private plans under ERISA and PBGC — and the two systems have historically been analyzed separately. The funding pressures, however, follow similar dynamics: contributions versus benefit payments, investment returns versus actuarial assumptions, demographics versus liability projections.

PensionWatch combines both data systems into a single rubric so workers, retirees, journalists, and researchers can compare funding health across the full U.S. pension landscape. A university professor and a corporate engineer might both be wondering whether their plan is safe; the answer comes from the same underlying questions even though the data sources and regulatory backstops differ.

The composite grade is uniform across plan types. Plan-specific context (PBGC coverage for ERISA plans, state-level backing for public plans, multi-employer support for collectively-bargained plans) is surfaced separately on each plan page so participants can read the headline grade alongside the protection structure that applies to them specifically.

What the funding ratio actually tells you

A funded ratio of 100% means current plan assets equal projected actuarial liabilities — at a specific measurement date, under a specific set of actuarial assumptions, using a specific discount rate. None of those inputs is uncontroversial.

Discount rate assumptions matter most. Public plans have historically used assumed long-term return rates of 7-8%, while private plans use mark-to-market interest rates around 4-5%. Two plans with the same headline funded ratio can carry very different real risk if one is using an aggressive return assumption.

Mortality assumptions matter second. The Society of Actuaries periodically updates standard mortality tables; plans that use older tables tend to understate liability because retirees have been living longer than older tables projected.

For a participant trying to read the funded ratio defensibly, the most useful question is: how does this plan's funded ratio compare to plans of the same type (public, private single-employer, multi-employer) using similar assumptions? The state and type filter pages on this site organize plans into those peer groups directly.

When the grade should trigger action

For a participant, the grade is informational rather than directly actionable in most cases — pension benefits are not portable, and the plan's sponsor is typically the only party that can change funded status materially. But the grade does have practical use cases.

For active workers, a consistently D or F grade combined with a frozen or critical-status designation should trigger close attention to the plan's funding-improvement plan (if private) or state pension reform discussions (if public). It does not necessarily mean benefits will be cut — most underfunded plans pay out promised benefits for decades, especially with PBGC or state backing — but it does mean the worker should understand what happens in the worst case.

For pre-retirees, a low grade combined with PBGC critical-status (private) or a state pension on a formal rehabilitation plan (public) is a reason to verify the federal benefit guarantee maximum or read the state's most recent pension reform legislation before counting on full promised benefits.

For everyone, the grade-and-source data on the plan page is a defensible foundation for conversations with retirement-planning advisors who can integrate the pension into the full retirement-income picture.