States Facing Fiscal Strain of Pensions

Obligations to Teachers May Outpace Assets

Illinois has a $20 billion problem.

The state has promised $51 billion in pensions to 225,000 current and retired teachers, but it has only $31 billion in its accounts to pay for those pensions.

At $20 billion in the red, the Illinois teacher-pension fund has the country’s biggest deficit for such a fund, but it’s not the only state with a problem. Faced with a tepid stock market, a rise in life expectancy, and teacher contracts that critics say inflate pensions, many states are seeking ways to tweak or even overhaul the way they...