Why Does Funding Status Vary Among State and Local Plans?

Source: Alicia H. Munnell, Kelly Haverstick, and Jean-Pierre Aubry, Center for Retirement Research at Boston College, State and Local Pension Plans #6, May 2008

From the summary:
While state and local pensions as a group are about as well funded as plans in the private sector, significant variation exists. More than 60 percent are adequately funded, but almost 40 percent are not. Low levels of funding means that future taxpayers will have to pay the cost of unfunded pension promises, as well as the unfunded costs of retiree health insurance. Alternatively, if taxpayers balk at covering these pension commitments, future beneficiaries risk losing benefits, such as ad hoc cost-of-living increases.

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