The Funding Status of Locally Administered Pension Plans

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While state-administered plans are about as well funded as private sector plans, stories circulate about the perils facing some individual cities. This brief sets out to assess the funding status of locally administered pensions by analyzing data from a survey of 84 plans from 38 states. It compares their funding status to that of state plans and reports on the factors that affect the level of funding among localities. Key findings include:

  • Local plans are at least as well funded as state plans (funding ratio: local — 85 percent vs. state — 84 percent).
  • Local plans have a strong track record in making their required contributions (69 percent do so compared with 54 percent of the states).
  • Despite this relatively positive outlook, some jurisdictions face serious shortfalls, and a deteriorating economy may produce a gloomier picture going forward.
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