The Miracle of Funding by State and Local Pension Plans

Source: Alicia H. Munnell, Kelly Haverstick, Steven A. Sass and Jean-Pierre Aubry, Center for State and Local Government Excellence

The brief’s key findings are:
* State and local pension plans, overall, are as well funded as private plans, with assets covering nearly 90 percent of liabilities.
* This outcome is striking, even “miraculous,” given that public plans:
– tend to pay larger benefits;
– use a more stringent funding yardstick; and
– are not covered by any national legislation that mandate funding standards.
* Assets per worker increased markedly in the1990s after states and localities responded to new standards issued by the Government Accounting Standards Board.

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