Alabama Employees Retirement System (ERS)

The plan runs underfunded at 70% — $6.7B short of fully covering projected benefit obligations. Recovery typically requires multi-year amortization plus strong investment returns; both factors interact with the broader interest-rate environment.

Alabama Employees Retirement System (ERS) is a public-sector pension plan sponsored by State of Alabama — covering government employees (state, local, or special-district workers). Public plans are not ERISA-governed and not PBGC-insured; they rely on state-level oversight and tax-base solvency. The plan remains active — accruing new benefits for current employees and accepting new participants. Among private-sector single-employer plans, the active status is increasingly rare as employers freeze accruals while continuing to fund existing obligations; public-sector plans are more often still actively accruing.

On scale: $15.5B in plan assets across 132,000 covered participants. With 62,000 workers still accruing and 70,000 drawing benefits, the plan has the size to support institutional asset management and full-time actuarial staff. The participant mix runs roughly even between 62,000 active workers and 70,000 retirees — a balanced demographic profile that gives the plan time to compound investment returns before payouts dominate cash flow. Annual cash flows: $850M in sponsor contributions versus $1.2B in benefit payments. Investment performance over the most recent year ran 5.6%, against the plan's assumed long-term return of 7.2%.

PBGC risk classification: moderate. The plan's funded status puts it under enhanced monitoring but not active intervention. Public plans like Alabama Employees Retirement System (ERS) are not PBGC-insured. The benefit guarantee rests on the sponsoring government's ability and willingness to make required contributions, which interacts with state and local tax-base dynamics.