Massachusetts state and local pension systems are underfunded by $57.5 billion, with approximately $17.7 billion of that debt owed at the municipal or county level, according to state data obtained by NewBostonPost.

“Cities and states with large unfunded pension liabilities are facing rising debt, and benefit costs are straining their budgets and burdening taxpayers. Governments have failed to set aside the money needed to pay for pension and health care benefits promised to workers, and now the bill is coming due,” said Zachary Christensen, managing director of Reason Foundation’s Pension Integrity Project.

Due to past failures by state and municipal leaders to fully fund pension obligations, Massachusetts taxpayers had paid more $22 billion more than their fair share as of 2023, according to a recent report from the MassInc Policy Center.

The debt is straining local budgets.

Springfield has the lowest funded pension system in the state, at 40.1 percent, which is actually an improvement from the late 2010s when it was at 26 percent. In 2023, the city allocated $56 million to shore up its ailing pension system — an amount equivalent to hiring a second police department, according to the MassInc report.

Springfield is hard-pressed to come up with such massive expenditures, since it is the poorest city in Massachusetts in terms of per-capita income. (Springfield Mayor Domenic Sarno’s office did not respond to repeated requests for comment.)

In New Bedford, the impact on the budget is even more pronounced — with annual pension spending exceeding what goes to police and fire.

“To cover this pension debt and the rising costs, governments face tough choices that may shift funding away from areas such as education, infrastructure,” Christensen said. “According to Reason Foundation research, state and local governments have seen their annual pension costs increase by 84% over the last decade. Without pension reforms, spending cuts, and significant budget adjustments, tax hikes are likely because these pension benefits are constitutionally protected.”

As of November 13, 2025, 11 cities were under 60 percent funded, according to data provided by the Massachusetts Public Employee Retirement Administration Commission, a state agency that regulates local and state pension systems. More than 60 of the state’s 351 cities and towns having a funding ratio below 80 percent, which is sometimes cited as a healthy threshold.

Another 35 communities are at or above the 80 percent mark but still not at 100 percent.

Christensen warns that anything less than full funding at 100 percent “inevitably passes on massive costs and debt to future generations of taxpayers.”

Officials at the state commission that oversees public pensions told NewBostonPost that funding ratios are just one measure of the health of a pension system; a city or town’s funding schedule and the actuarial assumptions it is using should also be considered.

“The systems overall, I think, are in a good place,” said Bill Keefe, executive director of the state’s Public Employee Retirement Administration Commission. “At PERAC, our priorities are ensuring that valuations are completed in accordance with the law, annual pension appropriations are fulfilled, and there is a funding schedule in place to be completely funded by the statutory deadline of 2040. All of those tasks have been regularly met by every retirement system and every city and town in the Commonwealth.”

(All the approved funding schedules can be viewed on PERAC’s web site.)

Systems that have the furthest to catch up are Gateway Cities like Springfield. (As defined by state law, a “gateway city” has a population between 35,000 and 250,000, a median household income below the state average, and a lower share of residents who have college or graduate degrees than the state average; gateway cities typically have a large immigrant population.)

The fifth lowest funded pension system is New Bedford’s, which is at 54.5 percent, with $400.2 million in unfunded retirement obligations. A spokesman for New Bedford Mayor Jon Mitchell said the city is making progress.

“The Mitchell administration has made paying down the pension obligation a top priority with regular increases in funding levels and utilizing free cash. The city is on track to achieve 100% funding by 2035, but the road ahead is steep and long,” said city spokesman Jonathan Darling.

Darling noted that the pension system has been “underfunded for decades, going back to the ‘80s and ‘90s,” which he said is “now putting tremendous fiscal pressure on the city’s operating budget.” For example, for fiscal year 2026, New Bedford appropriated $28.2 million to its pension fund — more than it spent on either the police or fire departments, according to Darling.

“Adding to the growing burden is the retirement board’s continued votes in favor of cost-of-living raises. The administration continues to advocate against the raises in order to limit the burden on taxpayers, but the board has been chronically unrealistic about the affordability of pension benefit expansions for years,” Darling said.

The retirement board has five members — the ex-officio city auditor, a mayoral appointee, two retiree representatives, and a fifth elected by the other four. The director of the board, Eric Cohen, did not respond to a request for comment by publication of this story.

Fitchburg, which ranks next after New Bedford, has a system that is 56.9 percent funded, with $137.1 million that remains unfunded.

The city has committed 10 percent of its operating budget to pensions, which will be fully funded by 2034, according to Fitchburg Mayor Sam Squailia, who cited economic setbacks, rising costs, and the state law that limits yearly increases in the property tax levy limit as factors in the current underfunding of the city’s pension fund.

“Fitchburg is a Gateway city, which has experienced the loss of its former industrial economic base,” Squailia told NewBostonPost. “This fact, combined with the revenue restraints of Prop 2 ½, and the demands of funding education, public safety, health insurance, debt, and day-to-day municipal services, explain the challenges in meeting the actuarial funding goal.”

Two snapshots of the unfunded liability of certain public employees pension funds in Massachusetts are below. For a view of more pension funds, click on "City Pensions" at the bottom of this story.

Massachusetts State and County Pensions Liability

How many retirees and how much of their expected pensions is unfunded