The Funding of State and Local Pensions: 2011-2015
Unsurprisingly, the funded status of state and local government pension plans declined in 2011 as plans continued to absorb the effects of the 2008-2009 stock market downturn. This issue brief provides a detailed update on plans’ funded status in 2011 and also reports projections for 2012-2015. Key findings include:
- During 2011, the funded status of public plans slipped slightly from 76 percent to 75 percent.
- This decline reflected slow asset growth due to actuarial smoothing, which was partly mitigated by an unexpected reduction in liability growth.
- Going forward, the funded ratio is projected to remain steady next year and then gradually improve as the market meltdown is phased out of the calculations.