If you attended or viewed a recent John Locke Foundation Shaftesbury Society presentation from N.C. State University Professor Robert Clark, you know North Carolina faces challenges in funding its pension obligations for retired state workers and teachers.

But if the news isn’t great in the Tar Heel State, it could be much worse. At least that’s the conclusion one might reach after reading a new report from the Manhattan Institute and the Foundation for Educational Choice.

Focusing on pension plans for teachers, the report finds “funding gaps are three times greater than states report.”

This report is the first to focus on the fact that states and cities aggressively ?discount? the cost of paying teachers? retirement benefits in the future. The authors estimate that unfunded financial liabilities of teachers? pensions are close to $933 billion, compared to states? approximation of $332 billion. The authors recommend reforms that states should adopt to prevent this gap from widening even more.

That’s the bad news. The not-so-bad news? North Carolina’s plan is one of the better-funded.

Of the fifty-nine funds in our sample, fifty-six show a funding deficit in their financial statements. After we made adjustments, all fifty-nine showed funding shortfalls. But some funds are in much better shape than others.

On the bright side, five plans are 75 percent funded or better: teacher-specific plans in the District of Columbia, New York State, and Washington State, and state employee retirement systems in North Carolina and Tennessee.

The worst-funded plan in our sample is the West Virginia Teachers? Retirement System, which we estimate to be only 31 percent funded. The four states whose plans have the next-worst funding gaps are Illinois, Oklahoma, Indiana, and Kansas; all are less than 40 percent funded.